The Trump administration is planning to expand the Commodity Futures Trading Commission’s (CFTC) authority to oversee significant portions of the $3 trillion digital asset market, Fox Business reported on Nov. 28.
This move marks a major shift in US regulation of crypto, replacing the enforcement-heavy current approach with one that is more innovative.
CFTC regulates crypto
This proposal will give the CFTC the authority to oversee spot markets of digital commodities such as Bitcoin and Ethereum which make up about 70% of global cryptomarket.
Plan also regulates the exchanges on which these assets are traded. There is currently no federal agency that clearly has authority over the spot cryptocurrency transactions.
Supporters argue that the CFTC’s expertise in derivatives markets makes it well-suited to oversee digital commodities. It is known as a less strict regulator than the Securities and Exchange Commission, which was criticized for their stringent regulations under Gary Gensler.
Former CFTC Chairman Chris Giancarlo, a key advocate for clearer crypto regulations, highlighted the agency’s readiness to take on the expanded role.
Giancarlo told Fox Business:
“With adequate funding and under the right leadership, the CFTC could begin regulating digital commodities effectively from day one.”
The plan comes as part of President-elect Donald Trump’s broader effort to restructure US financial regulation. Republican lawmakers have long criticized the SEC’s aggressive stance on digital assets, which included labeling most cryptocurrencies as securities.
Under Gensler, the SEC’s enforcement actions created friction with the crypto industry, pushing many participants to favor the CFTC as a primary regulator. In response, Trump’s administration seeks to overhaul the SEC’s leadership and operations, potentially steering the agency toward a more pro-innovation agenda.
The funding and legal hurdles
To regulate the spot crypto market, Congress must approve and increase funding. The agency’s current budget of $400 million and staff of 700 pale in comparison to the SEC’s $2.4 billion budget and 5,300 employees.
Rostin Behram, the outgoing chairman of the CFTC, has repeatedly asked for additional resources in order to meet his growing responsibilities.
Although the proposal is gaining traction in the crypto-community, industry experts and the traditional CFTC constituencies are concerned about potential spillovers on other commodities markets such as agriculture.
Giancarlo said that precise legislation language is essential in order to avoid disrupting existing supervision structures.
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