Former CFTC Chairman Chris Giancarlo has expressed strong support for the Commodity Futures Trading Commission (CFTC) taking on a larger role in regulating cryptocurrencies like Bitcoin BTC/USD and Ethereum BTC/USD.
What Happened: "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," Giancarlo told FOX Business on Tuesday.
He added that the CFTC's lighter regulatory approach, compared to the SEC's enforcement-heavy stance, would encourage innovation while protecting market integrity.
The CFTC currently oversees the $20 trillion U.S. derivatives market, which includes futures and options trading.
However, it lacks clear jurisdiction over cryptocurrency spot markets, where digital assets are bought and sold directly.
Under the Trump administration's proposal, the CFTC would gain oversight of these markets and the exchanges that facilitate trading, providing long-awaited regulatory clarity for the industry.
Giancarlo, often referred to as "Crypto Dad" for his pro-digital asset stance, has long championed the CFTC's involvement in crypto.
During his tenure, the agency recognized Bitcoin as a commodity in 2015 and approved Bitcoin futures trading. He believes expanding the CFTC's role would align with the agency's experience in handling complex financial markets.
"The CFTC has a proven track record in overseeing derivatives markets dominated by sophisticated institutional players," Giancarlo said.
"We are well-equipped to handle digital commodities like Bitcoin and Ethereum."
Why It Matters: Critics, however, caution that giving the CFTC broader authority could create challenges.
Some fear regulatory spillover into traditional commodities like agriculture and oil, which fall under the purview of other agencies.
Additionally, the CFTC's $400 million budget and 700-person staff are dwarfed by the SEC's $2.4 billion budget and 5,300 employees, raising concerns about resource constraints.
Giancarlo acknowledged these concerns but emphasized that additional funding from Congress would be necessary to ensure the agency's effectiveness.
"We must address funding and staffing challenges if the CFTC is to meet the demands of a rapidly evolving crypto market," he said.
The push for CFTC oversight comes as the crypto industry increasingly criticizes the SEC's regulatory approach under outgoing chairman Gary Gensler.
Gensler's tenure has been marked by aggressive enforcement actions, which many in the industry view as stifling innovation.
In contrast, the CFTC is seen as more industry-friendly, with Giancarlo noting, "A pro-innovation agenda is crucial for maintaining U.S. leadership in the global digital asset space."
Giancarlo is also being considered for a new role as "crypto czar" in the Trump administration, where he could oversee cryptocurrency policy and potentially establish an industry advisory council.
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