Trump Administration Eyes CFTC for Crypto Regulation, Plans to Weaken SEC's Role
The incoming Trump administration is reportedly considering a major overhaul of cryptocurrency regulation in the U.S., aiming to transfer significant authority from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). This potential shift would mark a notable departure from the SEC's historically aggressive stance on digital assets.
According to reports from Fox Business, the Trump team plans to empower the CFTC to oversee cryptocurrency exchanges and spot markets for digital assets deemed commodities, such as Bitcoin and Ether. This move aligns with statements made by outgoing SEC Chair Gary Gensler, who has long advocated for Bitcoin’s classification as a commodity.
Gensler, known for his stringent approach toward crypto, announced his resignation effective January 20, 2025, coinciding with President-elect Trump’s inauguration. Gensler’s departure signals the end of a contentious era for crypto at the SEC. His tenure was marked by numerous enforcement actions and a focus on defining regulatory boundaries for digital assets. While his push for stricter oversight drew praise from consumer advocates, it also faced significant backlash from industry leaders and policymakers advocating for a more balanced approach.
CFTC as the New Crypto Regulator?
The proposed regulatory shift would grant the CFTC greater authority over the crypto sector, potentially positioning it as the primary overseer for certain types of digital assets. This development would dilute the SEC’s influence, which has been criticized for its enforcement-heavy strategy under Gensler’s leadership.
Recent actions reinforce the CFTC’s stance on cryptocurrencies. In March 2024, the agency identified Ether as a commodity in a lawsuit against KuCoin. If the Trump administration moves forward, this classification could solidify the CFTC’s role in regulating major cryptocurrencies and associated markets, and its more tailored approach to commodities would foster innovation and attract investment, particularly for assets like Bitcoin and Ether.
Trump’s Pro-Crypto Agenda
President-elect Trump’s administration has signaled a more crypto-friendly stance, with proposals aimed at boosting the industry’s growth and integration into traditional financial systems.
Key elements of this agenda include a Federal Bitcoin Reserve, a crypto-specific White House role, as well as streamlined regulations regarding digital assets.