Trump wants the CFTC to be in charge of crypto regulation, not SEC

Donald Trump’s incoming administration has plans to hand over most of the crypto industry’s regulatory power to the Commodity Futures Trading Commission (CFTC).

This is a direct move to strip the Securities and Exchange Commission (SEC) of its grip on the $3 trillion crypto market—a market that’s been stuck in a regulatory disaster for years.

Trump’s idea? Get rid of the heavy-handed tactics the SEC used under Gary Gensler during Biden’s term. Instead, Trump wants a system that encourages innovation, especially in blockchain technology, while setting some boundaries for the growing crypto space.

CFTC’s new frontier

The CFTC might be a smaller regulator than the SEC, but Trump sees it as better suited for crypto. It already oversees the $20 trillion U.S. derivatives market, including futures, options, and commodities like gold, oil, and wheat.

Unlike the SEC, which regulates securities and targets small investors, the CFTC focuses on sophisticated institutional players who are seen as better at managing financial risks. This makes the agency a favorite among crypto insiders.

Under Trump’s plan, the CFTC’s job would grow to include overseeing Bitcoin, Ethereum, and other digital assets classified as commodities. This includes regulating spot markets—places where these assets are bought and sold—and the exchanges that handle those trades.

Right now, there’s no single regulator managing these markets, creating massive uncertainty for companies and traders. Chris Giancarlo, a former CFTC chair nicknamed “Crypto Dad,” backs this plan.

“With adequate funding and leadership, the CFTC could regulate digital commodities from day one of Trump’s presidency,” he said.

Giancarlo, who served under Trump during his first term, pushed for the CFTC to approve Bitcoin futures trading in 2017 and has been advocating for more crypto oversight ever since.

Biden’s outgoing CFTC Chairman Rostin Behnam also raised concerns about the lack of resources for crypto oversight. At a Senate hearing in July, he called for additional funding, noting that half of the CFTC’s enforcement actions this year were against crypto firms.

Behnam said the agency’s $400 million budget and 700 staff members are dwarfed by the SEC’s $2.4 billion budget and 5,300 employees.

Crypto’s future under Trump

Gensler labeled most cryptocurrencies as securities, making the SEC the crypto industry’s biggest enemy. Lawsuits, fines, and enforcement actions piled up, forcing many crypto companies to operate in legal limbo—or leave the U.S. altogether.

Trump’s team wants to fix this. They believe the CFTC’s lighter touch can provide the clarity the crypto industry has been begging for. According to sources, the Trump administration’s goal is to cut unnecessary regulations while still protecting investors from fraud.

The incoming administration also plans to create a new position: a ‘crypto czar.’ This person would lead a team of advisors shaping U.S. crypto policy. Giancarlo is a top contender for the role.

Giancarlo pointed out that the CFTC recognized Bitcoin as a commodity as far back as 2015. “The CFTC has been involved with crypto longer than people realize,” he said. He believes the agency has the experience needed to handle this expansion.

But not everyone is on board. Traditional CFTC constituencies worry that expanding its power could create new problems. Giving the agency authority over digital commodities might spill over into physical and agricultural markets, areas currently regulated by the Department of Agriculture.

Any legislation to expand the CFTC’s role will need to address these concerns clearly. Gensler’s progressive approach angered many in the industry and even within his own agency. Many senior officials resigned, and the SEC’s employee union repeatedly clashed with him.

“There’s a lot of work to be done at the SEC,” Giancarlo said. “Many of its top talents have left. We need to get it functioning again and focused on innovation.”

While Giancarlo was once considered a favorite to replace Gensler as SEC chair, he told Trump’s team he wasn’t interested in cleaning up what he called “Gensler’s mess.”

The question remains: who will lead the SEC next? Sources say Trump’s team is looking for someone who supports innovation but also has the administrative skills to handle the SEC’s broader responsibilities. Beyond crypto, the SEC oversees the $100 trillion securities market, which includes stocks, bonds, mutual funds, and treasuries.

Despite its challenges, the SEC still plays a vital role in the financial system. “The SEC has great bones,” Giancarlo said. “The next leader will need strong policies and leadership to make it work again.”

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