Donald Trump’s upcoming administration is considering a significant shift in cryptocurrency regulation by potentially assigning oversight of the crypto industry to the Commodity Futures Trading Commission (CFTC). This change could significantly diminish the regulatory authority currently held by the Securities and Exchange Commission (SEC). Reports suggest that the CFTC could regulate spot markets for digital assets classified as commodities, along with overseeing crypto exchanges, as the transition takes place.
The Trump team views the SEC’s recent enforcement actions as impediments to innovation within the U.S. crypto sector. They advocate for a less restrictive regulatory environment to foster growth in this burgeoning industry. Granting the CFTC regulatory responsibilities over cryptocurrencies would likely be welcomed by many in the industry, which has long expressed a preference for CFTC oversight due to the agency’s reputation for being more approachable and less stringent compared to the SEC.
Former CFTC Chairman Chris Giancarlo commented that, with sufficient funding and capable leadership, the CFTC could quickly commence regulation of digital commodities upon the start of Trump’s presidency. He had previously urged the Senate Agriculture Committee to support the CFTC’s role in overseeing the spot crypto market, highlighting the agency’s early recognition of Bitcoin as a commodity.
Currently, the CFTC operates on a significantly smaller budget and workforce than the SEC, managing an annual budget of $706 million compared to the SEC’s $3 billion for the 2024 fiscal year. The CFTC has a staff of around 700 employees, while the SEC employs more than 5,300. Given this disparity, calls for additional resources to enhance the CFTC’s regulatory capabilities are becoming increasingly urgent, particularly as a notable portion of the agency’s enforcement actions have targeted crypto businesses.
As the SEC prepares for leadership changes, with Chair Gary Gensler announcing his resignation set for January 2025, the regulatory landscape for digital assets may be poised for substantial transformation.
