CFTC Might Get Full Oversight over the US Crypto Market Under President Trump

The incoming Donald Trump administration in the US White House is considering granting oversight of the cryptocurrency industry to the Commodity Futures Trading Commission (CFTC), according to a Fox Business report.

Crypto Regulatory Shift in the US

Although not officially confirmed, this move could bring the regulation of spot markets for digital assets characterized as commodities, such as Bitcoin and Ethereum, and the exchanges offering them under the purview of the CFTC. The regulator already oversees Bitcoin and Ether options and futures.

Chris Giancarlo Was Formerly At The CFTC & TODAY It’s Been CONFIRMED That The CFTC Will Be Taking A Bigger Role Than The SEC In Regulating Digital Assets Under TrumpGiancarlo Is Highly Speculated To Be Trump’s “Crypto Czar”He Stated That He Believes The XRP Case Will Be… pic.twitter.com/4tXdoccK8W

However, Bitcoin and Ethereum exchanges also offer dozens of other digital assets. While none of the digital assets listed by US exchanges are categorized as securities, the Securities and Exchange Commission (SEC) frequently takes action against several tokens, alleging they are unregistered securities.

The SEC is also pursuing legal action against Coinbase, Binance, and Kraken, accusing them of offering unregistered securities.

The Tussle over Crypto Regulations

Generally, the SEC oversees the securities industry in the US, while the CFTC is tasked with regulating the commodities and derivatives markets. However, the SEC has a significantly larger budget and more resources. For the fiscal year 2024, the SEC received a $3 billion budget, compared to the CFTC’s $706 million. Additionally, the SEC has 5,300 staff members, while the CFTC has around 700.

The two regulators have often clashed over jurisdiction in the $3 trillion cryptocurrency market. If the incoming Trump administration assigns the CFTC with crypto oversight, it could bring greater regulatory clarity to the sector.

“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,” former CFTC Chairman Chris Giancarlo told Fox.

Notably, the CFTC has shown a friendlier stance towards cryptocurrencies compared to the SEC. The commodities regulator approved Bitcoin futures trading in 2017, while the SEC only authorized spot Bitcoin exchange-traded funds in 2024.

Meanwhile, Gary Gensler, the current SEC chair, confirmed his resignation effective January 20, coinciding with Trump’s White House inauguration. Gensler, who was perceived as hostile towards cryptocurrencies, has not yet been replaced by the incoming Trump administration.