The Trump administration plans to expand the authority of the Commodity Futures Trading Commission (CFTC) to oversee significant parts of the $3 trillion digital asset market, Fox Business reported on November 28.
This move would mark a crucial shift in US crypto regulation, aiming to replace the current enforcement-focused approach with a more innovation-friendly framework.
CFTC to regulate crypto
The proposal would vest the CFTC’s oversight of spot markets for digital commodities, including Bitcoin and Ethereum, which represent about 70% of the global crypto market.
The plan also includes regulating the exchanges where these assets are traded. Currently, no federal agency has clear jurisdiction over spot crypto transactions, leading to regulatory uncertainty.
Proponents argue that the CFTC’s expertise in derivatives markets makes it well suited to overseeing digital commodities. The agency is known for its lighter regulation compared to the Securities and Exchange Commission (SEC), which has faced criticism for its strict policies under outgoing Chairman Gary Gensler.
Former CFTC Chairman Chris Giancarlo, a leading advocate for clearer crypto regulations, emphasized the agency’s willingness to take on the expanded role.
Giancarlo told Fox Business:
“With adequate funding and under the right leadership, the CFTC could begin effectively regulating digital commodities from day one.”
The plan is part of newly-elected President Donald Trump’s broader efforts to restructure U.S. financial regulations. Republican lawmakers have long criticized the SEC’s aggressive stance on digital assets, including labeling most cryptocurrencies as securities.
Under Gensler, the SEC’s enforcement actions created friction with the crypto industry, leading many participants to choose the CFTC as their primary regulator. In response, the Trump administration is seeking to overhaul the SEC’s leadership and operations, potentially steering the agency toward a more pro-innovation agenda.
Funding and legislative hurdles
If the CFTC wants to regulate spot crypto markets, it would require congressional approval and more funding. The agency’s current budget of $400 million and 700-person workforce pale in comparison to the SEC’s $2.4 billion budget and 5,300 employees.
CFTC officials, including outgoing Chairman Rostin Behnam, have repeatedly requested additional resources to address the growing responsibilities.
While the proposal has gained traction within the crypto community, some industry experts and traditional CFTC constituencies are concerned about the potential spillover effects into other commodity markets, such as agriculture.
Giancarlo suggested that precise legislative language would be essential to ensure the new mandate does not disrupt existing oversight structures.