Key takeaways
- The Trump administration plans to transfer crypto oversight to the CFTC, expanding its authority.
- The move aims to reduce the SEC’s power over digital assets, providing regulatory clarity.
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The new Trump administration plans to expand the authority of the Commodity Futures Trading Commission by granting it oversight of a significant portion of the $3 trillion digital assets market, according to a report from FOX Business.
This change would be part of a broader effort to reduce the SEC’s regulatory power over the digital assets sector under the leadership of President Biden and SEC Chairman Gary Gensler.
Recently, Gensler announced that he would step down as SEC chairman on January 20, when Trump takes office.
The CFTC, which currently oversees the $20 trillion U.S. derivatives market, could see its role expand to include regulating spot markets for digital assets considered commodities, such as Bitcoin and Ethereum.
This expanded role would also cover trade in these assets, according to sources with direct knowledge of the Trump team’s plans.
“With adequate funding and under proper leadership, I believe the CFTC could begin regulating digital products on day one of Donald Trump’s presidency,” former CFTC Chairman Chris Giancarlo told FOX Business.
Giancarlo is being considered for a new position as “crypto czar” in the new administration.
He previously supported expanding the CFTC’s authority over crypto spot markets, highlighting the agency’s early involvement in digital assets when it deemed Bitcoin a commodity in 2015.
The move would bring regulatory clarity to companies and individuals trading the two largest crypto assets by market capitalization, as no regulator currently has clear jurisdiction over spot market transactions.
The CFTC’s current operating budget of $400 million is more than five times smaller than the SEC’s $2.4 billion, and it employs about 700 people, compared to the SEC’s 5,300.
Biden’s outgoing CFTC Chairman Rostin Behnam noted that about 50% of the agency’s enforcement actions this year have targeted crypto companies, despite having no mandate to regulate the sector.
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