Trump may shift crypto oversight to CFTC

Trump's administration may transfer crypto regulation to the CFTC, signaling a shift toward a more industry-friendly approach for digital assets.

The incoming Donald Trump administration may shift crypto regulation from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC), according to sources cited by Fox Business. This move could expand the CFTC’s authority over the $3 trillion digital asset market while reducing the SEC’s role.

Under the Biden administration, SEC Chair Gary Gensler faced criticism for classifying most cryptocurrencies, except Bitcoin, as securities, creating barriers for the industry. His “regulation-by-enforcement” strategy has been unpopular among crypto participants. Trump’s presidency signals a potential policy change, with plans to create a more crypto-friendly regulatory framework. A recent Texas court ruling overturning the SEC’s broker-dealer rule adds to the momentum for change.

The Trump administration reportedly plans to give the CFTC broader authority to oversee digital assets, including regulating exchanges and spot markets for commodities like Bitcoin and Ethereum. Former CFTC Chair Chris Giancarlo stated the agency could “start regulating digital commodities from day one” if adequately funded and led effectively. Giancarlo is also a candidate for a new “crypto czar” role, which would involve shaping policy and leading an advisory council.

Trump’s campaign positioned the U.S. as a potential “crypto capital of the world”, with plans to appoint regulators supportive of digital assets. Asset managers like Bitwise and WisdomTree see this as an opportunity for the approval of cryptocurrency exchange-traded funds (ETFs). Additionally, Trump’s transition team is exploring a Strategic Bitcoin Reserve (SBR) to address inflation and economic uncertainty, an idea supported by firms like BlackRock.

Globally, similar initiatives are emerging. In Brazil, a proposed bill aims to create a national Bitcoin reserve to diversify treasury holdings. Trump’s incoming administration could mark a significant turning point for cryptocurrency regulation, offering a more supportive environment for innovation and growth in the digital asset sector.