Trump administration seeks to expand CFTC’s crypto oversight, reducing SEC’s role

The incoming Trump administration is planning to expand the authority of the Commodity Futures Trading Commission (CFTC) to include oversight of parts of the $3 trillion digital asset market, particularly focusing on bitcoin, ethereum, and the exchanges where they are traded, according to a report by FOX Business. This shift aims to reduce the regulatory role of the Securities and Exchange Commission (SEC), which has faced criticism under outgoing chairman Gary Gensler for its aggressive enforcement actions in the crypto space.

The proposed move aligns with the administration’s broader agenda to foster innovation in the digital asset industry while restructuring the relationship between financial regulators. The CFTC, often seen as a lighter-touch regulator compared to the SEC, is already responsible for overseeing the $20 trillion U.S. derivatives market. Expanding its role to include spot market regulation for digital commodities could provide much-needed clarity for the crypto industry, which has long called for more consistent oversight.

Former CFTC Chair Chris Giancarlo, dubbed “Crypto Dad,” is a strong advocate for the agency’s expanded role and is reportedly being considered for a new position as “crypto czar” under the Trump administration. Giancarlo argues that with proper funding and leadership, the CFTC could quickly begin regulating digital commodities, building on its past experience with bitcoin futures. However, the agency’s limited budget and workforce compared to the SEC remain significant challenges.

While the crypto industry broadly supports the idea of the CFTC taking a leading regulatory role, concerns have been raised by traditional stakeholders who fear that granting the agency new authority could inadvertently impact markets for physical and agricultural commodities. To address these issues, any legislation giving the CFTC expanded authority would need to include clear language limiting its scope.

FOX Business also reported that Trump’s team plans to reform the SEC, aiming to repair its internal culture after years of turmoil under Gensler. The new administration will seek leadership that not only supports crypto innovation but also ensures effective oversight of the broader $100 trillion securities market, including stocks, bonds, and mutual funds.

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FOX Business