- The Trump administration is considering designating the CFTC to oversee the crypto market.
- The move would eventually limit the SEC’s regulatory overreach, sparking optimism.
- The CFTC’s smaller budget and workforce pose challenges in expanding its regulatory power.
President-elect Donald Trump’s administration is considering appointing the Commodity Futures Trading Commission (CFTC) to regulate the $3 trillion cryptocurrency market. This proposal aligns with Trump’s plans to reshape America’s financial regulations.
The move could curb the Securities and Exchange Commission’s (SEC) control over crypto, a regulatory body often criticized for overreach by the industry.
CFTC to Take Over Crypto Oversight
A Fox Business report dated November 26, 2024, revealed that the Trump administration plans to transfer crypto regulatory powers to the CFTC. The body would oversee digital assets like Bitcoin and Ethereum, which are classified as commodities. This expansion would also include regulating spot markets and cryptocurrency exchanges.
The decision is driven by the belief that the SEC’s enforcement actions have stifled innovation in the crypto space. Trump’s team, along with industry experts, argue that more balanced rules could encourage growth.
Read also: Coinbase Escalates SEC Battle, Demands CFTC Disclosures
Former CFTC Chairman Chris Giancarlo stated, “With adequate funding and under the right leadership, I think the CFTC could hit the ground running to begin regulating digital commodities on day one of Donald Trump’s presidency.”
Currently, the CFTC regulates derivatives markets, including futures and options on commodities like gold and oil. If the proposal moves forward, the agency will oversee a large portion of the cryptocurrency market, raising optimism about regulatory reform in the U.S.
Challenges in Expanding CFTC’s Authority
While the move excites industry stakeholders, expanding the CFTC’s jurisdiction faces hurdles. The agency operates on a comparatively smaller budget than the SEC, which could hinder its ability to manage the vast crypto market. Additionally, the CFTC’s workforce of around 700 employees would require significant scaling, including increased funding and resources.
However, CFTC Commissioner Summer Mersinger supported the proposal, arguing that the agency’s approach is well-suited for regulating spot markets despite its current limitations.
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