Crypto industry awaits Trump's CFTC chair pick as Behnam announces exit
President-elect Trump's CFTC pick will be consequential for the crypto industry
Who are candidates for CFTC chair?
FOX Business' Charlie Gasparino breaks down the important position in the Trump administration on 'The Claman Countdown.'
The Trump transition team has vetted at least half a dozen potential candidates to run the Commodity Futures Trading Commission (CFTC), as the president-elect seeks to make good on his promise for a more crypto-friendly regulatory environment, FOX Business has learned.
Under Trump, the CFTC could take on a bigger role in the regulation of the $3.5 trillion crypto market, including, if Congress permits, oversight of the spot market of certain digital assets like bitcoin and ethereum, where the regulatory landscape is murky. In recent years, the CFTC, which oversees around $500 trillion in the trading of currencies and financial derivatives, has been in a turf war with the larger Wall Street boss, the Securities and Exchange Commission (SEC), over regulating the crypto market.
The industry typically favors the CFTC as its primary regulator due to a perceived lighter regulatory touch. President Biden's SEC, led by Chairman Gary Gensler, engaged in a sweeping crackdown on U.S. crypto companies, angering the industry and resulting in the offshoring of businesses.
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On the campaign trail, Trump promised to end the regulatory onslaught and make the U.S. the "crypto capital of the planet" and received millions in campaign contributions from wealthy digital coin executives. As he gets ready to take office on Jan. 20, Trump has appointed several industry-friendly candidates to key administration positions, including pro-crypto lawyer Paul Atkins to replace Gensler at the SEC, and Scott Bessent, a believer in bitcoin, to run the Treasury Department.
His CFTC chair pick — at least for the crypto industry — could be the most consequential. In recent weeks, Trump’s transition team has interviewed CFTC Commissioner Summer Mersinger, Andreessen Horowitz’s crypto policy chief Brian Quintenz and Marco Santori, the former chief legal officer for Kraken, who has not yet announced he is leaving the crypto exchange to pursue a possible role in the administration.
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 / Getty Images)
Other candidates vetted and who remain on the short list include Republican Commissioner Caroline Pham, as well as Neal Kumar and Josh Sterling, lawyers who previously served in senior positions at the agency.
Mersinger, Quintenz, Santori, Pham, Kumar and Sterling all declined to comment for this story. A Trump transition rep did not return a request for comment.
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Biden’s CFTC Chair Rostin Behnam announced Tuesday he will step down from the role on Jan. 20, sparking renewed interest in who Trump will choose to succeed him. While the president-elect will ultimately have the final say on the matter, two policy insiders who spoke to FOX Business described Quintenz and Mersinger as the "odds-on front-runners" for the job. Both have government experience, are familiar with the agency and are respected inside various Washington, D.C., policy circles.
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 have endeared themselves to the crypto industry by criticizing the Biden-Gensler approach to regulating the nascent industry by unleashing the SEC to bring enforcement actions against top crypto companies over the past four years, often over small infractions, while major scandals such as the FTX debacle went unnoticed until investor losses ensued.
Quintenz and Mersinger argue that so-called "regulation by enforcement" has driven innovation overseas to avoid this. Instead, they say, regulators need to proactively engage with the industry to create clear and consistent rules of the road and believe that the CFTC is best suited to do this since it is less of a cop and more of an oversight body.
Quintenz’s position as head of policy for Andreessen Horowitz’s crypto fund, a16z, means he has a working relationship with industry and government agencies to advocate for comprehensive regulations on behalf of clients.
His connection to a16z is thought to give him a slight edge in the process, given founder Marc Andreessen’s position as one of Trump’s top crypto and artificial intelligence advisers. Trump also nominated Quintenz to serve on the commission in 2017, when he worked closely with then-Chair 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 Sept. 13, 2016. (Paul Chinn/The San Francisco Chronicle via / Getty Images)
Mersinger, the former deputy chief of staff to Senate Majority Leader John Thune, R-S.D., is considered a crypto thought leader as well. She is a frequent speaker at industry events, where she has talked about the importance of balancing innovation with consumer protection. Her dissents on a handful of enforcement cases brought by the CFTC against so-called decentralized finance (DeFi) companies — entities that operate using blockchain technology — have won her the respect of many who operate in the space.
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"Regulation through enforcement is, at best, a band-aid," Mersinger said in her September dissent about the CFTC’s settlement with the decentralized crypto exchange Uniswap. "At some point, the Commission must engage in a rulemaking process around DeFi and consider our role in promoting responsible innovation for the future of the U.S. derivatives market."