Representatives in Washington want the Commodity Futures Trading Commission (CFTC) regulate Crypto, but there are questions about whether the agency is up to work.
Last week, American Congress French Hill Issued The first draft of the Clarity Act, a bill that will create a new category of property, “Digital Commodity”. This will allow qualified property to trade relatively independently on the secondary market. It will also give CFTC most of the authority to regulate cryptocurrency.
CFTC is empowered and ruled by the Commodities Exchange Act (CEA), which amended a huge law amended by new law and modernize it. Like the Securities and Exchange Commission and many other federal commissions, CFTC consists of five commissioners, each of which must be confirmed by the Senate.
Currently, one of these chairs sits empty, with other commissioners ready to leave the agency in the near future. This may obstruct the CFTC’s ability to effectively regulate the Crypto industry, passing the Clarity Act.
CFTC’s ability to work on Crypto Limited as enrollment stalls
By convention, when a presidential administration changes, and especially when the administration changes the parties, the CFTC president resigns to allow the President to appoint a new chair. In particular, CEA states that no more than three can belong to the same political party.
When Donald Trump took over in January 2025, former Democratic President Rostin Behanam resigned from his seat. After some time, after considering the candidates to replace the former chair Benhem, Trump nominated a replacement in February: Brian Quintage, former Commissioner, Head of A16Z Crypto and members of Kalashi Board.
Then nothing happened. For months, the enrollment of Quintese sat sluggish and unconscious. This is not uncommon, as the Senate may be occupied with other high-purpose laws such as Trump’s budget bill and the Genius Stabelcoin Act.
This means that, when Benhem left in January, the Commission has been stunned with two Democratic and two Republican Commissioners. This does not mean that the business of CFTC has been stopped; Some functions of so -called independent agencies sit inside the chair office, and Caroline is working since the reception of the phel Trump.
But some do not work. These include issuing or amending rules, policy statements, exemptions or any action criteria. All these require the majority of the commissioners, which are controversial, which are controversial, it would be impossible in the equally divided CFTC. Enforcement is also limited, as the enforcement division requires “approval of the majority of the Commission” to advance new tasks.
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So far, the Crypto industry has been fine with it. One of the most important complaints of the industry with the administration of former President who Biden was that it was engaged in “regulation by enforcement”. CFTC has overcome the problem, closing to pursue an enforcement or regulatory agenda.
The most notable example has been the prediction market industry. Legal prediction markets are administered as a “event contract” under the Commodity Exchange Act. Historically, CFTC has barred these contracts from inclusion of highly main categories such as election, award shows and sports, but at the end of 2024, the prediction market forum Kalshi won a landmark legal battle with the then-Benham-led CFTC to allow election markets.
After Trump won the 2024 election, space continued to develop as aggressive entrances pushed the boundaries. Crypto.com certified its own prediction markets for Super Bowl in December, and Biden CFTC moved to block it. After Trump took over, however, the new CFTC allowed markets to move forward, effectively created a new market for passively passively passively appropriately approved play betting.
In some cases, the Democratic Commissioner may choose to cooperate with the Republican, as it was when Democrat Christie Goldsmith Romero voted to dismiss CFTC’s 2024 election forecasting market winning appeal.
However, there is real disagreement, the commission cannot function. And this problem can be acute in the near future.
Other CFTC Commissioners are stepping down
The nomination hearing of Quintage before the Senate Agriculture, Nutrition and Forestry Committee is scheduled for 10 June, but as soon as it is coming through the doors, others are leaving out.
Last week, two of the remaining four CFTC commissioners, Republican Summer Marsinjar and Democrat Goldsmith Romero left the Commission. Although this does not change the deadlock with the commission, it suggests that the gridlock can be difficult to break. This is because the rest of the Republican Commissioner Fam has also said that she will leave and when Quintage is sworn in.
In addition, there is no plan to overcome this deficiency of capacity. No other commissioners have been announced, and no reporting has suggested that there is also a list under consideration.
Perhaps the Trump administration has been considering for a long time as the remaining Democrat Commissioner Christin Johnson has also announced his departure, although without any time limit (his term continues until 2027). Assuming that they can achieve the quintage, they can simply wait for Johnson and maintain a unique control over the Ostance Five-Person Commission.
This will be strictly legal as Section 2 (A) (3) of CEA State america “A vacancy in the Commission will not disrupt the rights of the remaining commissioners to exercise all the powers of the Commission.”
But does its validity mean that it is a good idea?
Delay in betting industry was a warning sign
On 5 February, CFTC Announced A round table to discuss sports betting on federally registered prediction markets “in about 45 days”. CFTC listens to comments for a few months and then bring everyone together and let them talk.
Subsequently, shortly thereafter, a malestom entered the industry, as Nevada, New Jersey, Maryland and many other states followed the federally registered prediction market Kalshi in the federal court.
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As they were in cases, it became clear that the option to allow these new markets would eventually rest with CFTC. And yet, as the observers of the industry turned their eyes towards the commission, no decision came.
Members of the gambling industry who were waiting for the declared roundateeable, were waiting as a 45-day deadline. Behind the curtain, CFTC set the date for April 30, but publicly, the agency did not say anything on the case until a week before the incident, when they canceled it.
For those trying to nominate CFTC as the central regulator of the entire cryptocurrency industry, it should have been a canary-in-in-coela-khan moment. An entire industry – federally regulated sports betting – was waiting to weigh on a regulatory body, and in the moment of its need, nothing happened.
This is not the CFTC prosecution, but it can reflect the lack of capacity. The agency suddenly came into the limelight in an instant when its commissioners were already planning their exit and the administration’s plans for its future were clearly away.
Quintage may solve this problem, but can the Cryptocurrency industry actually put its entire future at stake on it?
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