Original title: Crypto industry awaits Trump's CFTC chair pick as Behnam announces exit
Original author: Eleanor Terrett
Original source: https://www.foxbusiness.com/
Compiled by: Daisy, Mars Finance
FOX Business has learned that Trump's transition team has reviewed at least six potential candidates to lead the Commodity Futures Trading Commission (CFTC), as President-elect Trump seeks to fulfill his promise of promoting a more crypto-friendly regulatory environment.
Under Trump's leadership, the CFTC could play a larger role in regulating the $35 trillion crypto market, including (if Congress allows) oversight of the spot markets for certain digital assets like Bitcoin and Ethereum, where the regulatory environment remains unclear. In recent years, the CFTC has been responsible for overseeing approximately $500 trillion in currency and financial derivatives trading, competing with the larger Wall Street regulatory agency—the Securities and Exchange Commission (SEC)—in regulating the crypto market.
The industry generally tends to view the CFTC as its primary regulatory agency, as the agency is believed to adopt lighter regulatory measures. Under President Biden, the Securities and Exchange Commission (SEC), led by Chairman Gary Gensler, has conducted a massive crackdown on U.S. crypto companies, angering the industry and prompting many businesses to relocate overseas.
Trump's inauguration attracted a significant amount of crypto donations.
During the campaign, Trump promised to end the regulatory crackdown and make the U.S. the 'global capital of cryptocurrency,' receiving millions of dollars in campaign donations from wealthy digital currency executives. As he prepares to take office on January 20, Trump has appointed several pro-industry candidates to key positions, including crypto-friendly lawyer Paul Atkins to replace Gensler as SEC chairman and Bitcoin supporter Scott Bessent as Treasury Secretary.
The CFTC chair he chooses—at least for the crypto industry—may be the most influential. In recent weeks, Trump's transition team has interviewed CFTC Commissioner Summer Mersinger, Andreessen Horowitz's crypto policy head Brian Quintenz, and former Kraken Chief Legal Officer Marco Santori, who has yet to announce he will leave the crypto exchange Kraken to seek a potential position in government.
Brian Quintenz, head of policy at a16z Crypto, speaks during the Permissionless II event in Austin, Texas, on Sept. 11, 2023. (Thomas Allison/Bloomberg via Getty Images)
Other reviewed candidates still on the shortlist include Republican committee member Caroline Pham, as well as lawyers Neal Kumar and Josh Sterling, who have held senior positions at the agency.
Mersinger, Quintenz, Santori, Pham, Kumar, and Sterling all declined to comment on this report. A representative for Trump's transition team did not respond to a request for comment.
Trump nominates Paul Atkins to lead the Securities and Exchange Commission (SEC)
President Biden's CFTC Chairman Rostin Behnam announced on Tuesday that he will resign on January 20, raising renewed attention on whom Trump will choose to succeed him. While the elected president will ultimately make the final decision, two policy-related insiders told FOX Business that Quintenz and Mersinger are the 'most likely front-runners' for the position. Both have government work experience, are familiar with the agency, and are respected in multiple policy circles in Washington, D.C.
Commodity Futures Trading Commission Chairman Rostin Behnam speaks during the Piper Sandler Global Exchange and FinTech Conference in New York City on June 5, 2024. (REUTERS/Brendan McDermid / Reuters)
They won support from the crypto industry by criticizing the Biden-Gensler administration's regulatory approach to the emerging sector. Over the past four years, the SEC has taken enforcement actions against major crypto companies for minor violations, while significant scandals like the FTX collapse went unnoticed before investor losses occurred.
Quintenz and Mersinger argue that so-called 'regulation through enforcement' has pushed innovation overseas, forcing companies to avoid this situation. Instead, they state that regulators need to proactively engage with the industry to establish clear and consistent rules and believe that the CFTC is best suited for this task, as it operates more like a regulatory body rather than an enforcement agency.
The crypto industry celebrates Trump's appointment of David Sacks as the 'czar' for AI and the crypto industry to lead innovation in the sector.
Quintenz serves as the head of policy for Andreessen Horowitz's crypto fund a16z, meaning he has close working relationships with both the industry and government agencies, advocating for comprehensive regulation on behalf of clients.
His relationship with a16z is seen as giving him some advantages in this process, as founder Marc Andreessen is one of Trump's main advisors on crypto and artificial intelligence. Trump also nominated Quintenz to serve as a CFTC commissioner in 2017 and worked closely with then-chairman Chris Giancarlo to approve regulated futures contracts for Bitcoin and Ethereum.
Venture capitalist Marc Andreessen speaks at the TechCrunch Disrupt conference in San Francisco on Tuesday, Sept. 13, 2016. (Photo By Paul Chinn/The San Francisco Chronicle via Getty Images / Getty Images)
Mersinger, a former deputy chief of staff to Senate Majority Leader John Thune, is considered a thought leader in the crypto industry. She is a frequent attendee at industry events and has spoken about the importance of balancing innovation with consumer protection. Her dissent in several enforcement cases brought by the CFTC against so-called decentralized finance (DeFi) companies—entities operating using blockchain technology—has earned her respect from many in the industry.
In her September dissent regarding the CFTC's settlement with decentralized crypto exchange Uniswap, Mersinger stated: 'Regulation through enforcement is at best a band-aid solution.' She also said: 'At some point, the Commission must initiate a rulemaking process regarding DeFi and consider our role in fostering responsible innovation in the future of the U.S. derivatives market.'
