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The Trump transition team has vetted at least half a dozen potential candidates to run the Commodity Futures Trading Commission (CFTC), as the president-elect looks to fulfill his promise for a more crypto-friendly regulatory environment, Fox Business has learned.
Under Trump, the CFTC could take a bigger role in regulating the $3.5 trillion crypto market, including overseeing certain spot markets, if Congress allows. Digital assets Like Bitcoin and Ethereum, where the regulatory landscape is unclear. In recent years, the CFTC, which oversees about $500 trillion in currency and financial derivatives trading, has been in a turf war with the Securities and Exchange Commission, the biggest Wall Street boss, over regulation of the crypto market.
The industry generally favors the CFTC as its primary regulator because of a perceived light regulatory touch. President Biden's SEC, led by Chairman Gary Gensler, engaged in a sweeping crackdown on US crypto companies, angering the industry and resulting in the offshoring of businesses.
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On the campaign trail, Trump promised to end the regulatory onslaught and make the United States the “crypto capital of the planet,” and received millions in campaign contributions from wealthy digital currency executives. As he prepares to assume office on January 20, Appointed by Trump Several industry-friendly candidates for key administration posts include pro-crypto lawyer Paul Atkins to replace Gensler at the SEC and bitcoin believer Scott Besant to run the Treasury Department.
His CFTC chair pick – at least for the crypto industry – may turn out to be the most mature. In recent weeks, Trump's transition team has interviewed CFTC Commissioner Samar Mersinger, Brian Quintenz, head of crypto policy at Andreessen Horowitz, and Marco Santori, the former chief legal officer of Kraken, who has not yet announced that he is leaving the crypto exchange for a possible role. Administration
Brian Quintenz, head of policy at A16z Crypto, speaks during the Permissionless II event on September 11, 2023 in Austin, Texas. (Thomas Allison/Bloomberg via Getty Images/Getty Images)
Other candidates under scrutiny include Republican Commissioner Carolyn Pham, as well as Neil Kumar and Josh Sterling, lawyers who previously served in senior positions at the agency.
Mersinger, Quintenz, Santori and Pham declined to comment for this story. Kumar and Sterling did not return requests for comment. Trump's transition representative also did not return requests for comment.
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Biden's CFTC Chair Rostin Behnam announced Tuesday that he will step down from the role on Jan. 20, sparking renewed interest in who Trump will choose to replace him. While the president-elect will ultimately have the final say on the matter, two policy insiders who spoke to Fox Business described Quintenz and Mercinger as “obvious-on front-runners” for the job. Both have government experience. The agency is familiar with and respected in various Washington, DC, policy circles.
Commodity Futures Trading Commission Chairman Rostin Behnam speaks during the Piper Sandler Global Exchange and FinTech Conference on June 5, 2024 in New York City. (Reuters/Brendan McDermid/Reuters)
They freed the SEC to bring enforcement actions against top crypto companies over the past four years, often for minor infractions, while for major scandals like FTX, endearing themselves to the crypto industry by criticizing Biden-Gensler's approach to regulating the fledgling industry. The defeat went unnoticed until investors took losses.
Quintenz and Mersinger argue that so-called “regulation by enforcement” has driven innovation abroad to avoid this. Instead, they say, regulators should actively engage with industry to create clear and consistent rules of the road believes that the CFTC It is best suited to do this because it is less of a police and more of an oversight body.
Quintenz's position as head of policy at Andreessen Horowitz's crypto fund, a16z, means he has a working relationship with industry and government agencies to advocate for comprehensive regulation on behalf of clients.
His connection to a16z is believed to give him a slight edge in the process, given founder Marc Andreessen's position as one of Trump's top crypto and artificial intelligence advisers. Trump nominated Quintenz to serve on the commission in 2017, when he worked closely with then-Chairman Chris Giancarlo to approve regulated futures. Contracts for Bitcoins and Ethereum.
Venture capitalist Marc Andreessen speaks at the TechCrunch Disrupt conference on Tuesday, Sept. 13, 2016, in San Francisco. (Photo by Paul Chinn/The San Francisco Chronicle via Getty Images/Getty Images)
Mercinger, former deputy chief of staff to the Senate majority leader John Thune, RS.D., is considered a crypto thought leader. He is a frequent speaker at industry events where he talks about the importance of balancing innovation with consumer protection. His dissent on several enforcement cases brought by the CFTC against so-called decentralized finance (DeFi) companies – entities that operate using blockchain technology – has won respect from many who work in the space.
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“Regulation through enforcement is a Band-Aid at best,” Mersinger said in September in his dissent over the CFTC's settlement with decentralized crypto exchange Uniswap. “At some point, the Commission must engage in a rulemaking process around DeFi and consider our role in promoting innovation that is responsible for the future of the US derivatives market.”