INSUBCONTINENT EXCLUSIVE:
Representatives in Washington want the Commodity Futures Trading Commission (CFTC) to regulate crypto, but there are questions about whether
the agency is up to the task.Last week, US Congressman French Hill released the first draft of the Clarity Act, a bill that would create a
It would also give the CFTC most of the authority to regulate cryptocurrency.The CFTC is empowered and governed by the Commodities Exchange
Act (CEA), a sprawling law periodically modified by new legislation to amend and modernize it
Like the Securities and Exchange Commission and many other federal commissions, the CFTC comprises five commissioners, each of whom must be
presidential administration changes, and particularly when the administration changes parties, the CFTC chair resigns to allow the president
former Democratic Chair Rostin Behnam resigned his seat
After some time considering candidates to replace former Chair Benham, Trump nominated a replacement in February: Brian Quintenz, former
commissioner, a16z crypto head of policy, and Kalshi board member.Then nothing happened
act.This means that, since Benham left in January, the commission has been deadlocked with two Democratic and two Republican commissioners
These include issuing or amending regulations, policy statements, exemptions or no-action criteria
All of these require a majority vote of the commissioners, which, to the extent such regulations are controversial, will be impossible in an
US regulator moves to drop appeal against KalshiSo far, the crypto industry has been fine with this
example has been the prediction market industry
Historically, the CFTC has prohibited these contracts from involving highly salient categories like elections, awards shows and sports, but
in late 2024, the prediction market platform Kalshi won a landmark legal battle with the then-Benham-led CFTC to permit election
Crypto.com self-certified its own prediction markets for the Super Bowl in December, and the Biden CFTC moved to block it
After Trump took office, however, the new CFTC tacitly allowed the markets to proceed, effectively creating a new market for federally
regulated sports betting through inaction.In some cases, Democratic commissioners may choose to cooperate with the Republicans, as was the
to the extent there is real disagreement, the commission cannot act
Senate Agriculture, Nutrition, and Forestry Committee is scheduled for June 10, but just as he is coming through the doors, others are
MersingerMoreover, there appears to be no plan to remedy this lack of capacity
administration is taking the long view since remaining Democrat Commissioner Kristin Johnson has also announced her departure, albeit
without a deadline (her term continues until 2027)
Assuming they can get Quintenz in, they may simply be able to wait out Johnson and retain in him singular control over the ostensible
idea?Betting industry delays were a warning signOn Feb
as shortly thereafter, a maelstrom descended on the industry, as Nevada, New Jersey, Maryland and a number of other states pursued the
percolated, it became clear that the choice to allow these new markets would ultimately rest with the CFTC
And yet, as industry observers turned their eyes to the commission, no decision came down.Members of the gambling industry who were intently
waiting for the announced roundtable waited as the 45-day time limit counted down
Behind the scenes, the CFTC set the date for April 30, but publicly, the agency said nothing more on the matter until a week before the
should have been a canary-in-the-coal-mine moment
The agency was abruptly thrust into the spotlight at a moment when its commissioners were already planning their exits and the
really bet its whole future on it?Magazine: Baby boomers worth $79T are finally getting on board with Bitcoin
