The cryptocurrency industry awaits Trump’s pick for CFTC chair as Behnam announces exit

Trump’s transition team has vetted at least six potential nominees to run the Commodity Futures Trading Commission (CFTC), as the president-elect seeks to make good on his promise of a more favorable regulatory environment for cryptocurrencies, FOX Business has learned.

Under Trump, the CFTC could take on a greater role in regulating the $3.5 trillion cryptocurrency market, including, if Congress allows, overseeing the spot market for certain cryptocurrencies. Digital assets Like Bitcoin and Ethereum, the regulatory landscape is murky. In recent years, the Commodity Futures Trading Commission (CFTC), which oversees about $500 trillion in currency and derivatives trading, has been locked in a turf war with Wall Street’s biggest boss, the Securities and Exchange Commission, over regulation of the cryptocurrency market.

The industry typically prefers the CFTC as its primary regulator due to its lighter regulatory touch. President Biden’s Securities and Exchange Commission, led by Chairman Gary Gensler, has engaged in a broad crackdown on US cryptocurrency companies, angering the industry and leading to companies being moved offshore.

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During his campaign, Trump promised to end the regulatory onslaught and make the United States the “crypto capital of the planet” and received millions in campaign contributions from wealthy cryptocurrency executives. As he prepares to take office on January 20. Trump was appointed Several industry-friendly candidates for key administration positions, including pro-crypto lawyer Paul Atkins to replace Gensler at the SEC, and Bitcoin believer Scott Besent, to run the Treasury Department.

His selection to head the Commodity Futures Trading Commission (CFTC) may be — at least for the cryptocurrency industry — the most significant. In recent weeks, Trump’s transition team has interviewed Summer Mersinger, the commissioner of the Commodity Futures Trading Commission (CFTC), Andreessen Horowitz’s head of cryptocurrency policy, Brian Quintenz, and Marco Santori, Kraken’s former chief legal officer, who has not yet announced that he will leave. Cryptocurrency exchange to pursue a potential role in management.

Brian Quintenz, Head of Policy at a16z Crypto, speaks during the Permissionless II event in Austin, Texas, on September 11, 2023. (Thomas Allison/Bloomberg via Getty Images/Getty Images)

Other candidates who were vetted and remain on the shortlist include Republican Commissioner Carolyn Pham, as well as Neil Kumar and Josh Sterling, attorneys who previously served in senior positions at the agency.

Mersinger, Quintins, Santori, Pham, Kumar and Sterling all declined to comment for this story. Trump’s transition representative did not return a request for comment.

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Biden’s Commodity Futures Trading Commission (CFTC) Chairman Rustin Behnam announced Tuesday that he will step down from the position on January 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 political insiders who spoke to FOX Business described Quintins and Mersinger as “the front-runners” for the job. They both have government experience, They are familiar with the agency and respected within various political circles in Washington, DC.

Commodity Futures Trading Commission Chairman Rustin Behnam speaks during the Piper Sandler Global Exchange and FinTech Conference in New York City on June 5, 2024. (Reuters/Brendan MacDiarmid/Reuters)

They have endeared themselves to the cryptocurrency industry by criticizing the Biden-Gensler approach to regulating the nascent industry by unleashing the SEC to take enforcement actions against major cryptocurrency companies over the past four years, often for minor infractions, while major scandals Like FTX, the debacle went unnoticed until investor losses ensued.

Quintens and Mersinger argue that so-called “regulation by enforcement” has pushed innovation abroad to avoid this. Instead, they say, regulators need to proactively engage with industry to set clear and consistent rules of the road We believe the CFTC She is best suited to do this because she is less of a policeman and more of a watchdog.

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Quintenz’s position as head of policy for Andreessen Horowitz’s cryptocurrency fund, a16z, means he has a working relationship with industry and government agencies to advocate for comprehensive regulations on behalf of clients.

His association with a16z is believed to give him a slight advantage in the process given founder Marc Andreessen’s status as one of Trump’s top advisors on cryptocurrency and artificial intelligence. Trump also nominated Quintez to serve on the commission in 2017, when he worked closely with then-Chairman Chris Giancarlo to approve regulated futures. Bitcoin contracts And Ethereum.

Venture capitalist Marc Andreessen speaks at the TechCrunch Disrupt conference in San Francisco on Tuesday, September 13, 2016. (Photo by Paul Chen/San Francisco Chronicle via Getty Images/Getty Images)

Mersinger, former deputy chief of staff to the Senate Majority Leader john Thune, RSD is considered a pioneer in the cryptocurrency space as well. She is a frequent speaker at industry events where she speaks about the importance of balancing innovation with consumer protection. Her opposition to a handful of enforcement cases brought by the CFTC against so-called decentralized finance (DeFi) companies — entities that operate using blockchain technology — has earned her the respect of many who work in the field.

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“Regulation by enforcement is, at best, an adjunct,” Mersinger said in her September dissent over the CFTC’s settlement with decentralized cryptocurrency exchange Uniswap. “At some point, the Commission must engage in the rulemaking process around DeFi and consider our role in promoting responsible innovation for the future of the US derivatives market.”