CFTC Shifts Focus, Moves Away from “Regulation by Enforcement
The U.S. Commodity Futures Trading Commission (CFTC) has announced a shift away from its previous “regulation by enforcement” approach, which was notably used during the Trump administration to oversee crypto firms.
CFTC acting chair Caroline Pham explained that the agency’s Division of Enforcement will now focus primarily on tackling fraud, moving away from a strategy that had targeted “good actors” in the industry.
To support this new direction, the CFTC will establish two specialized task forces. One will address retail fraud and violations of the Commodity Exchange Act, while the other will focus on complex fraud and market manipulation.
Brian Young, acting director of enforcement, emphasized that this restructuring aims to “strengthen our active and vigorous enforcement program,” enabling the agency to apply its expertise more effectively to cases that ensure justice for victims and maintain public confidence in the integrity of U.S. markets.
This shift marks one of Pham’s first actions since taking on the role of acting chair on January 20, following the resignation of Rostin Behnam. As of the announcement, a nominee to fill Behnam’s position had not been named, though President Trump is expected to announce one before February 7.
In other regulatory news, the CFTC reported over $17 billion in monetary relief for fiscal year 2024, much of which came from actions against the now-defunct FTX crypto exchange. The commission has also taken enforcement actions against major crypto figures and entities, including Binance and its CEO Changpeng Zhao, along with former Voyager and Celsius CEOs, Stephen Ehrlich and Alex Mashinsky.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) has also been making changes under the Trump administration. On January 21, the SEC unveiled a new crypto task force to develop a regulatory framework for digital assets, led by acting chair Mark Uyeda. The confirmation of Paul Atkins, Trump’s nominee to replace former SEC Chair Gary Gensler, is awaiting a Senate vote.
To further engage with the industry, Pham announced that the CFTC will host public roundtable discussions, potentially covering topics related to digital assets. Additionally, the CFTC is reportedly investigating Super Bowl-related bets offered by Crypto.com and the betting platform Kalshi, with the championship game set for February 9.
