Donald Trump’s incoming administration reportedly wants the Commodity Futures Trading Commission to oversee the crypto industry — a move that could drastically roll back some of the regulatory power from the Securities and Exchange Commission.

The role could see the CFTC take on the regulation of spot markets for digital assets deemed commodities and crypto exchanges, Fox Business reported on Nov. 26, citing sources familiar with the matter.

United States President-elect Trump’s team believes the SEC’s enforcement actions against industry players has slowed crypto innovation in the US and that a less stringent approach is needed to facilitate more growth, Fox reported.

If the CFTC is handed regulatory control of crypto, it would be a big win for the local industry, which has long signaled the agency would be its preferred regulator as it’s perceived as fairer and has a lighter touch.

“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.

🇺🇸 JUST IN: The Trump administration is eyeing the CFTC to oversee digital asset regulation, per FOX. pic.twitter.com/9Ha5SBSq8o

— Cointelegraph (@Cointelegraph) November 26, 2024

Giancarlo tried to convince the Senate Agriculture Committee — which oversees the CFTC — to support the CFTC’s oversight of the spot crypto market by arguing the regulator’s early engagement with Bitcoin when it called it a commodity in 2015.

The CFTC approved Bitcoin options under Giancarlo’s leadership in December 2017.

CFTC Chair Rostin Behnam, who shares mostly moderate views on crypto, also asked the Senate Agriculture Committee for extra funding to regulate crypto markets more effectively than through enforcement. 

The CFTC’s $706 million operating budget to police fraud and market manipulation is more than four times smaller than the SEC’s $3 billion for the 2024 financial year.

The commodities regulator also only employs around 700 staff compared to the SEC’s 5,300.

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Around 50% of the CFTC’s enforcement actions have been brought against crypto businesses in 2024 — which Behnam has called a “staggering statistic” for an agency that isn’t mandated to regulate the industry.

Some of this enforcement action has come against crypto companies that are not even based in the US.

Meanwhile, the SEC’s leadership is set to change, with Chair Gary Gensler confirming last week that he will resign on Jan. 20, 2025, when Trump is inaugurated.

SEC Commissioner Jaime Lizárraga will also step down from his position on Jan. 17, motivated by a desire to spend more time with his wife, who is reportedly battling cancer.

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