Trump Administration Considers Shifting Crypto Oversight to CFTC, Reducing SEC Influence

The Trump administration is considering expanding the Commodity Futures Trading Commission's (CFTC) authority to oversee the cryptocurrency market, potentially positioning it as the primary regulator for Bitcoin (BTC) and Ethereum (ETH), moving away from the Securities and Exchange Commission's (SEC) dominance.

The plan aims to classify these assets as commodities, which would allow the CFTC to apply a lighter regulatory approach, encouraging innovation in the crypto space.

Former CFTC Chair Christopher Giancarlo supports the move, believing the agency could begin regulating digital commodities effectively with the right resources. This proposal contrasts with the SEC’s more aggressive enforcement style, which has been criticized for stifling the industry. The push to empower the CFTC aligns with the Trump administration’s goal to reduce regulatory barriers.

The SEC and CFTC have long disagreed over how to classify digital assets, creating regulatory uncertainty. The new plan would clarify these roles, with the CFTC already asserting jurisdiction over Ethereum’s futures contracts. A bipartisan bill, the “BRIDGE Digital Assets Act,” is also in the works to foster collaboration between the agencies and establish a unified regulatory framework.

While the CFTC is seen as more business-friendly, concerns remain about its ability to handle the expanded responsibilities due to its smaller budget and staff compared to the SEC. Additionally, traditional CFTC constituencies, such as agricultural traders, worry about the impact of the new responsibilities. Addressing these concerns will be key to gaining broad support for the plan.