Key Takeaways
The incoming Trump administration is reportedly considering a bold shift in crypto regulation by positioning the Commodity Futures Trading Commission (CFTC) as the primary authority overseeing the $3 trillion market.
If enacted, this move could curtail the Securities and Exchange Commission’s (SEC) regulatory dominance and fulfill former President Donald Trump’s key campaign promise to champion crypto innovation.
According to a Fox Business report , the incoming administration plans to expand the CFTC’s jurisdiction to include broader oversight of cryptocurrencies, potentially encompassing spot markets for Bitcoin, Ethereum, and other digital assets classified as commodities.
Traditionally, the CFTC has regulated derivatives markets, fostering competition and protecting investors from fraud.
However, under this proposal, the agency would gain authority over significant portions of the crypto market.
“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,” said Chris Giancarlo, former CFTC chairman and a known crypto advocate.
Insiders with direct knowledge of the discussions say this shift would empower the CFTC to regulate spot trading platforms and exchanges, which have operated in a regulatory gray area for years.
Under chair Gary Gensler, the SEC took a more aggressive stance on crypto regulation, relying on a “regulation-by-enforcement” strategy.
This approach has drawn criticism for creating uncertainty and stifling innovation.
Over the past few years, the SEC has initiated numerous enforcement actions against leading crypto firms, levying billions in fines.
While some companies have successfully fought back in court, the broader crypto industry has faced delays and setbacks due to regulatory ambiguity.
Trump’s plan to elevate the CFTC could dramatically reduce the SEC’s influence, addressing long-standing complaints from industry stakeholders.
Many in the crypto community view the SEC as overly restrictive, arguing that its enforcement actions have hindered adoption and progress.
Trump’s commitment to streamlining crypto regulation aligns with his broader promise to reduce government overreach.
During his campaign, he garnered support from pro-crypto advocates, pledging to ease regulatory burdens and appoint industry-friendly officials to key positions.
His early administration picks suggest he intends to follow through. Reports indicate Trump plans to create a “crypto czar” position within the White House, alongside appointing pro-crypto lawmakers to senior roles.
Bitcoin and Ethereum account for more than 70% of the crypto market and are widely regarded as commodities.
The CFTC’s leadership could provide much-needed clarity.
Advocates argue that having a single, specialized regulator for commodity-classified cryptocurrencies would create a more predictable and innovation-friendly environment.