Decoding the White House’s Choices for Market Watchdogs

The White House plans to nominate Brian Quintenz as the chief of the Commodity Futures Trading Commission (CFTC), according to media reports quoting sources.

As the new Donald Trump administration begins to revise cryptocurrency legislation, the CFTC, which has hitherto played a supporting role in financial policy, is anticipated to take center stage.

Quintenz is currently the head of policy at a16zcrypto, a venture capital fund that has been investing in crypto and web3 startups at all stages since 2013.

He was the CFTC chairman between 2017 and 2021, when the regulator of commodity derivatives markets was not a prominent player in financial policy.

The crypto industry will see this nomination as Trump keeping his promise of a pro-digital assets era.

According to the a16zcrypto website, Quintenz served as commissioner of the CFTC and was unanimously confirmed by the US Senate in August 2017 after being nominated by both Obama and Trump.

Under his leadership, the CFTC's Technology Advisory Committee held more public briefings and discussions on crypto policy than any other federal financial regulator.

While he was in charge of the CFTC, DeFi grew rapidly, and the first approved futures contracts for Bitcoin and Ether were listed on derivatives exchanges.

Throughout, he advocated for personalized, risk-adjusted regulation.

Before the CFTC role in 2017, Quintenz was the Founder and Managing Principal of Saeculum Capital Management.

For the first six and a half years of his professional life, he worked on Capitol Hill as a senior policy advisor for a lawmaker.

The other White House nominations include former Federal Deposit Insurance Corporation (FDIC) member Jonathan McKernan as permanent director of the Consumer Financial Protection Bureau (CFPB) and Jonathan Gould to lead the Office of the Comptroller of the Currency.

The nomination of McKernan comes at a time when the Trump administration essentially shut down the watchdog.

The CFPB's operations were halted, its future funding was threatened with reduction, and its headquarters temporarily closed. As a result, another layer of regulation over financial institutions that deal directly with consumers was removed.

Russell Vought, the agency's interim head, directed personnel to halt all "supervision and examination activities" and threatened to eliminate the agency's funding.

Since Congress created the organization in 2010, conservatives and the industry have criticized it.

To stop him, a union representing certain CFPB workers sued. In a federal complaint lodged in Washington, the National Treasury Employees Union argued that Vought's actions violate the US Constitution because they undermine Congress's power to establish and fund the agency's duties.

In spite of Republican claims that the CFPB is unaccountable and has overstepped its authority, it regulates the industry that made the hazardous mortgage products that caused the financial meltdown.

Financial institutions, title companies, mortgage brokers, and money transfer services are all under its purview.

While the agency is currently experiencing tremendous turmoil, McKernan would assume control if confirmed by the US Senate.

The FDIC board member McKernan has stepped down after serving since January 2023.

In his previous roles, he advised the Treasury Department on legal matters and was senior counsel at the Federal Housing Finance Agency. He was also an advisor to Republican Senator Pat Toomey's US Senate Banking Committee.

The other nomination of Jonathan Gould to lead the Office of the Comptroller of the Currency is also seen as Trump keeping his election pledge to make America the crypto hub of the world.

Following his time as chief legal officer of cryptocurrency startup Bitfury, Gould was most recently a partner at the Washington, DC, law firm Jones Day.

Under Republican Idaho Senator Mike Crapo, Gould served as chief counsel for the Senate Banking Committee in 2018. Gould would head the agency responsible for overseeing big national banks if confirmed to the OCC.

Trump's appointees will undoubtedly bring a more industry-friendly worldview to their respective agencies, thanks to their extensive experience inside government agencies, on Capitol Hill, or at large Wall Street corporations.

Nevertheless, the level of aggression displayed by those leaders and their intentions regarding the reform or dismantling of current agencies are still up in the air.

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