After years of being the dominant regulatory force in digital assets, the SEC faces possible jurisdictional changes as the Trump administration considers expanding CFTC's powers over the crypto market.
More CFTC Oversight
With Trump's presidency on the horizon, the influence of the cryptocurrency sector within Republican politics may pave the way for an expanded role for the CFTC. According to FOX Business sources, the Trump administration proposes empowering the CFTC to oversee spot markets for assets like Bitcoin and Ethereum, along with trading platforms. Former CFTC Chairman Chris Giancarlo stated, "With adequate funding and under the right leadership, I think the CFTC could hit the ground running to begin regulating digital commodities on day one of Donald Trump’s presidency."
Ending the Crypto Turf War
No regulatory agency currently has explicit authority over digital asset transactions. Outgoing CFTC head Rostin Behnam reiterated that most crypto assets are classified as commodities under current rules, noting the ongoing jurisdictional battle with the SEC. Should Congress approve the proposal, granting CFTC oversight would resolve years of regulatory uncertainty and the alleged SEC overreach.
SEC Criticism and Implications
Under President Biden, the SEC has faced sharp criticism for heightened enforcement actions. In 2023, 46 lawsuits were filed against crypto entities—up 53% from the previous year. High-profile cases involve allegations against Binance and Coinbase, accused by the SEC of running unregistered exchanges and violating securities laws.
If Congress approves the jurisdictional shift, the CFTC could resolve longstanding disputes and uncertainties in the crypto industry, leading to reduced tensions and more predictable market regulation.
