Caroline Pham, acting chair of the US Commodity Futures Trading Commission (CFTC), announced that the agency would be winding down its practice of regulation by enforcement, likely impacting its approach to crypto firms during the Trump administration.
In a Feb. 4 notice, Pham said the CFTC was restructuring the priorities for its Division of Enforcement to focus on fraud, suggesting that the move “will stop regulation by enforcement” against “good citizens.” The commission will divide its responsibilities into two task forces focused mainly on retail fraud and violations of the Commodity Exchange Act and “complex fraud and manipulation.”
“This taskforce realignment will enhance our vigorous and energetic enforcement program by empowering our talented staff to focus their expertise on matters that secure justice for victims and uphold public confidence in the integrity of our markets,” said acting enforcement director Brian Young.
The shift in the commission’s approach to enforcement was one of Pham’s first actions since becoming the CFTC acting chair on Jan. 20 following former chair Rostin Behnam’s stepping down. At the time of publication, it was unclear whom US President Donald Trump intended to nominate to fill Behnam’s seat at the CFTC once he leaves on Feb. 7.
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In December, the CFTC reported more than $17 billion in monetary relief for fiscal year 2024, mainly from the regulator’s actions against defunct crypto exchange FTX. The commission has also filed enforcement actions against Binance and its CEO, Changpeng Zhao, former Voyager CEO Stephen Ehrlich, and former Celsius CEO Alex Mashinsky.
Changes across US regulators under Trump
Another major US financial regulator, the Securities and Exchange Commission, announced on Jan. 21 that it would form a crypto task force to develop a framework for digital assets. SEC Commissioner Mark Uyeda has been leading the agency as acting chair until the US Senate decides whether to confirm Paul Atkins, Trump’s pick to replace former Chair Gary Gensler.
On Jan. 27, Pham announced that the commission would hold public roundtable discussions on market issues, engaging with industry leaders to potentially include digital assets. Reports also suggested the CFTC was investigating Super Bowl bets — the championship game is scheduled for Feb. 9 — offered by Crypto.com and betting platform Kalshi.
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