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In a sweeping move, Donald Trump’s administration plans to shift regulatory authority over the $3 trillion crypto market to the Commodity Futures Trading Commission. The proposal focuses on Bitcoin and Ethereum, aiming to simplify rules and enhance oversight.
CFTC's Potential Oversight of Bitcoin and Ethereum
Fox Business reports that the Trump administration is trying to expand the CFTC's regulatory authority by giving it control over the burgeoning digital asset market.
Since cryptocurrencies like Bitcoin and Ethereum are already regarded as commodities under the law, this plan would aim squarely at them. If everything goes according to plan, the Commodity Futures Trading Commission will be able to oversee the spot markets and exchanges.
The futures and options markets for commodities such as gold and oil are presently regulated by the Commodity Futures Trading Commission in the United States. But overseeing the spot markets for digital assets has not been the commission's job. This change will provide the regulatory body more power to make sure everyone is playing by the rules and that businesses are being fair.
Trump’s Push for Simplified Crypto Regulations
This move is in line with President Trump's agenda to ease cryptocurrency regulations while strengthening industry oversight, Coingape points out.
But compared to the Securities and Exchange Commission (SEC), the CFTC's present budget is significantly smaller. In contrast to the SEC's $2.4 billion, the CFTC's budget for 2024 is close to $400 million. The inconsistency makes it harder for the government to keep an eye on a $3 trillion market.
Furthermore, there are 5,300 personnel working for the SEC, whereas the CFTC only has 700. In order to address this capacity issue, the commission may need more resources and money if it is assigned the responsibility of monitoring transactions involving digital assets.
Chris Giancarlo Advocates for CFTC Leadership
Stronger crypto regulation and the agency's enlarged role are causes that former CFTC chair Chris Giancarlo is in favor of. According to Giancarlo, the commission's involvement in the cryptocurrency market dates back to 2015, when it officially recognized Bitcoin as a commodity.
Giancarlo has proposed that the regulatory body might oversee digital commodities if given enough resources and direction.
One of the leading candidates for the position of White House crypto czar under Donald Trump is Giancarlo, who goes by the nickname "Crypto Dad" due to his liberal views on blockchain technology and digital money. This position will encourage blockchain development and simplify crypto rules.
The commission's approval of Bitcoin futures trading under Giancarlo's leadership further established its place as the regulator of the cryptocurrency industry.
Industry Support for CFTC Grows Amid SEC Criticism
Crypto exchanges are vital to the market, and the regulatory body would have the power to oversee them as well as the spot market.
On January 20, 2025, SEC head Gary Gensler announced his resignation in response to the many voices in the crypto business expressing unhappiness with the agency's stance. Consequently, the cryptocurrency industry has rallied behind Donald Trump's call for the CFTC to take the lead.
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