Trump Considers CFTC as Regulatory Agency for Cryptocurrency

SEC's Cryptocurrency Regulatory Authority Reduced

Donald Trump, the President-elect of the United States, is reportedly considering the Commodity Futures Trading Commission (CFTC) instead of the Securities and Exchange Commission (SEC) as the agency to lead cryptocurrency regulation in the next administration, Fox Business reported on the 26th (local time).

Fox Business stated that Trump and the Republican Party are reviewing this approach to weaken the regulatory authority the SEC has exercised over cryptocurrencies.

The CFTC, often called the SEC's "younger sibling," oversees the $20 trillion U.S. derivatives market, including futures, options, gold, oil, and wheat trading. The derivatives market is dominated by institutional investors suited for risk management rather than small investors. Therefore, CFTC regulations are considered lighter than those of the SEC.

According to sources, the role of the CFTC in the next administration could expand to include regulation of the spot markets and exchanges for cryptocurrencies such as Bitcoin and Ethereum. Granting the CFTC regulatory authority over the cryptocurrency market would also give it the power to regulate exchanges trading these assets. Key figures in the upcoming Trump administration believe that less stringent regulations are necessary to promote innovation in the cryptocurrency industry, including blockchain technology.

Fox Business reported that the SEC, under Chairman Gary Gensler, has led crackdowns across the cryptocurrency industry over the past three years to reinforce the view that most cryptocurrencies, except Bitcoin, are securities. This has caused Chairman Gensler and the SEC to lose popularity within the U.S. cryptocurrency industry. Chairman Gensler has announced he will step down on January 20th, the inauguration day of President-elect Trump.

Chris Giancarlo, former CFTC Chairman known as the "Crypto Daddy," stated, "With the right funding and leadership, I believe the CFTC can begin regulating digital commodities from the first day of President-elect Trump's term." Giancarlo served as CFTC Chairman during Trump's first term and is currently mentioned as the "Crypto Czar" in the new administration. This role involves implementing cryptocurrency policies and overseeing an industry-led advisory committee, though specific responsibilities have yet to be determined.