Washington representatives want the Commodity Futures Trading Commission (CFTC) to fix the crypto, but there are questions about whether the agency is in the task.
Last week, the US Congressman French Hill released The first draft of The Clarity Act, a bill that will create a new category of ownership, the “digital commodity.” This will allow qualified possessions to freely exchange in the second market. It will also provide the CFTC of most authorities to repair cryptocurrency.
The CFTC has been empowered and governed by the Commodities Exchange Act (CEA), a dazzling law that has been replaced by the new law to change and modernize it. Like the Securities and Exchange Commission and many other federal commissions, the CFTC is made up of five commissioners, each of which must be confirmed by the Senate.
Currently, one of these chairs is sitting empty, along with the other commissioners who are set to leave the agency in the near future. It can prevent the CFTC’s ability to effectively adjust the crypto industry if clarity passes.
CFTC’s ability to act on crypto limited as stall nominations
Through the convention, when a president administration changes, and especially if administrations are changing parties, the CFTC chair has resigned to allow the President to appoint a new seat. Notably, the CEA prescribes that no more than three can be the same political parties.
When Donald Trump opened his office in January 2025, former democratic chairman Rostin Behnam resigned from his chair. After a few hours considering candidates to replace former chairman Benham, Trump appointed a replacement in February: Brian Quintenz, former commissioner, A16Z Crypto Head of Policy, and a member of the Middle Board.
Then nothing happened. For months, Quintenz’s nomination was seated and worthless. This is not uncommon, as the Senate may be occupied by other high priorities such as Trump’s budget budget and the Genius Stablecoin Act.
This means that, since Benham left in January, the commission has been -deadlocked with two Democrats and two Republican Commissioners. This does not mean that the CFTC business has stopped; Some of the functions of the so-called independent agencies are sitting inside the seat office, and Caroline Pham is acting a seat from Trump’s climb.
But some operations are not. This includes issuance or amendment of regulations, policy statements, exclusion or standards in no action. All of this requires a vote of the majority of commissioners, which, until such regulations are controversial, is impossible with an equally divided CFTC. The implementation is also limited, as the implementation of the division requires “approved by a majority of the commission” to pursue new actions.
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So far, the crypto industry is well. One of the most significant complaints of the industry in the management of former President Joe Biden is that it is engaged in “regulation by implementation.” By stopping to pursue an implementation or regulatory agenda, the CFTC has remedied the problem.
The most well -known example is the prediction market industry. Legal predictions markets are administered as “event contracts” under the Commodity Exchange Act. Historically, the CFTC forbids these contracts involved in extremely amazing categories such as elections, shows and sports awards, but in late 2024, the predicting platform that Bashi won a landmark legal battle in noon-Benham led by CFTC to allow election markets.
After Trump won the 2024 election, the space continued to change as aggressively entered pushed the boundaries. Crypto.com self-certified its own prophecy market for the Super Bowl in December, and the Biden CFTC moved to block it. After Trump’s office, however, the new CFTC tacitly allowed the markets to continue, effectively creating a new market for federally regulated sports betting by inaction.
In some cases, democratic commissioners may choose to cooperate with Republicans, as is the case when Democrat Christy Goldsmith Romero voted to remove the CFTC’s appeal to the success of the 2024 Malashi election election.
However, until there is real disagreement, the commission cannot act. And this problem can be chronic in the near future.
Other CFTC commissioners are declining
Quintenz’s hearing before Senate Agriculture, Nutrition, and Forest Committee was set to June 10, but as he passed through the doors, others came out.
Last week, two of the remaining four CFTC commissioners, Republican Summer Mersinger and Democrat Goldsmith Romero, left the commission. While it does not change the commission’s deadlocked math, it suggests that gridlock may be more difficult to break. This is because the remaining Republican Commissioner Pham also said he was leaving and when Quintenz swore.
Moreover, there seems to be no plans to remedy the lack of this capacity. No other commissioners have been announced, and no reporting has suggested that there is a list considered.
The Trump administration has probably been looking at since the remaining Democrat commissioner Kristin Johnson has also announced his departure, even without a deadline (his term continues until 2027). Assuming they can get Quintenz, they can only wait for Johnson and keep him the sole control of the deadly commission of five people.
It will be strictly legal, as Section 2 (a) (3) of CEA state that “a commission vacancy will not harm the right of the remaining commissioners to use all the powers of the commission.”
But does its legality mean it is a good idea?
Delays in the betting industry are a warning sign
On February 5, the CFTC announced A circle “at about 45 days” to discuss sports estimates in markets registered with federal prophecy. The CFTC will listen to the comments for a few months and then take everything and let them talk.
It has become extremely necessary, as for a while, a maelstrom who has come down to the industry, such as Nevada, New Jersey, Maryland and many other states pursuing the federal registered Milki market in the federal court.
Related: Blashi accuses Nevada and New Jersey gaming regulators
While these cases were embarrassing, it became clear that the choice to allow the new market would eventually rest on the CFTC. And yet, as the observers of the industry turned away from the commission, there was no decision to go down.
Members of the gambling industry intensely waiting for the announced roundtable waited as the 45-day time limit counts. Behind the scenes, the CFTC set the date for April 30, but in public, the agency said there was nothing else until a week before the event, when they cancel it.
For those seeking to appoint the CFTC as a central regulator of the entire cryptocurrency industry, it should be a canary-in-the-coal-mine moment. An entire industry – federal regulated sports betting – awaits a regulatory body to weigh, and at the moment of need, nothing has happened.
This is not a CFTC accusation, but it may reflect a lack of capacity. The agency suddenly pushed attention to a moment when the commissioners were already planning their releases and the administration’s plans for the future were far from clear.
Quintenz probably solves this problem, but can the cryptocurrency industry really bet on its entire future?
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