In the past 16 months of the Trump administration, the commission has shrunk its work force, purged career officials, sharply curtailed crypto enforcement and helped out prediction markets at virtually every turn, The Times found. The gutting of the agency is particularly notable because of the Trump family’s deep ties to the crypto and prediction industries. The Trumps have sold…
The Republican chairman and top Democrat on the U.S. House Agriculture Committee are both asking President Donald Trump to name a full slate of commissioners for the Commodity Futures Trading Commission — the agency that will have a central role in regulating the crypto sector as new rules are proposed and the market structure-focused Clarity Act progresses through the Senate.
Chairman Glenn “GT” Thompson, a Pennsylvania Republican, and Representative Angie Craig, a Minnesota Democrat, sent a letter to the president on Friday, urging the nomination of four more commissioners — two from each party. Currently, the agency is in the highly unusual situation of being led by its Republican chairman, Mike Selig, who is the sole commissioner.
Source: U.S. House lawmakers who oversee the CFTC are urging Trump to fill the commission
The Commodity Futures Trading Commission is going through one of the biggest upheavals in its 50-year history as it takes on prediction markets and braces for a new role as crypto cop, but those efforts will fall short without more cash or personnel, agency veterans say.
Trump-appointed Chairman Michael Selig, currently the agency’s sole commissioner while the other four seats remain vacant, has emphatically sought to assert the CFTC’s exclusive jurisdiction over prediction markets, bringing lawsuits against states and their gambling regulators. The agency also stands to solidify its role as crypto’s main US watchdog under the CLARITY Act (H.R. 3633), digital asset market structure legislation that cleared a key hurdle in the Senate Banking Committee last week.
The Trump administration is seeking more money and a bigger headcount for the CFTC, but it has also lost scores of employees since last January during the president’s bid to slash the federal workforce.
“These departures included the loss of seasoned, senior, veteran lawyers and economists in key areas of the commission’s divisions responsible for licensing, supervision, oversight, and enforcement,” said former Democratic CFTC Commissioner Kristin Johnson, now a law professor at George Washington University.
The CFTC had 551 total staff at the end of March, as its headcount plummeted from 631 last September and 726 at the end of fiscal 2024, according to Office of Personnel Management data.
Source: CFTC’s Ex-Leaders Doubt It Can Juggle Crypto, Prediction Markets
The post-Jarkesy litigation landscape is developing as anticipated. Litigants are increasingly invoking the Supreme Court’s decision in SEC v. Jarkesy (No. 22-859) to challenge the constitutionality of state administrative enforcement proceedings, particularly where agencies seek punitive monetary penalties through in-house tribunals without a jury trial rather than courts.
Two notable examples are now pending before the Delaware and Arizona Supreme Courts. In both matters, the parties argue that state agencies cannot constitutionally pursue fraud-based or securities-related penalty actions through internal administrative proceedings without affording defendants a jury trial.
The Delaware case, Swan Energy, Inc. v. Investor Protection Unit (No. N24C-03-071 MAA), involves an administrative securities fraud action seeking substantial civil penalties. Swan argues that, under Jarkesy, claims seeking monetary penalties and analogous to common-law fraud must be tried before a jury rather than adjudicated internally by the same agency prosecuting the case. The Arizona case, EFG America v. Arizona Corporation Commission (No. CV-25-0134-PR), presents a similar challenge involving the Arizona Corporation Commission’s ability to impose civil penalties through administrative proceedings without a jury.
Rep. Ashley Hinson (R-Iowa) introduced a resolution Thursday that would amend the House rules to ban members and their staff from trading on prediction markets.
“No Member, Delegate, Resident Commissioner, officer, or employee of the House of Representatives” may engage in purchasing or selling on prediction markets, the resolution says, referring to agreements or contracts that are dependent on the occurrence of specific events.
Hinson’s proposal mirrors one approved by unanimous consent in the Senate last week, in which senators agreed to amend the chamber’s standing rules to ban senators and staff from engaging in prediction markets. It also has similar language to an amendment that was added to the Senate resolution making clear it does not apply to insurance.
Source: Rep. Ashley Hinson Pushes Prediction Market Ban for US House Members, Staff – Bloomberg
Senate and House Democrats have launched an investigation into whether pardons and commutations issued by President Trump were driven by “pay-to-play dynamics,” according to letters obtained by CBS News.
Among the pardons being probed by lawmakers are those granted to cryptocurrency billionaire Changpeng Zhao, who pleaded guilty to money laundering; nursing home operator Joseph Schwartz, who was convicted of tax crimes; and entrepreneur Trevor Milton, sentenced to four years in prison in 2023 after being convicted of lying to investors. […]
Because Democrats are in the minority in both the House and the Senate, they lack subpoena power and can only request cooperation from the pardon recipients. But this unusual pipeline for clemency will likely be a top oversight area for Democrats should they take back majorities in either chamber of Congress in the midterm elections this year. That would give them the authority to compel documents on clemency and other areas of oversight.
Source: Trump pardon recipients face congressional investigation over “pay-to-play” questions – CBS News
But the CFTC under Selig’s sole leadership has a long way to go to take on the expansive universe of digital commodities, while also contending with a web of emerging jurisdictional questions around prediction markets, agency watchers say.
“It’s hard to imagine expanding the remit of a federal agency that already punches above its weight in terms of its size and capacity without increasing the resources allocated to the commission,” said Kristin Johnson, a former Democratic CFTC commissioner who’s now a professor at George Washington University Law School.
The CFTC has lost more than 20% of its staff since the end of fiscal 2024, and was down to fewer than 550 employees as of February, according to Office of Personnel Management data. It was hiring for just six full-time roles as of late Thursday, according to USAJobs listings.
Reductions in force last year hit economists and enforcement personnel at the CFTC, as well as licensing and supervision staff, according to Johnson. […]
“There’s definitely going to be more on the CFTC’s plate,” said Frank Zarb, a partner at Proskauer Rose LLP and former SEC special counsel. “The CFTC is going to have to find a way to increase its staffing in order to perform all the functions that the market structure legislation would allocate to it.”
Source: Crypto Bill Languishes in Senate, Leaving Tiny CFTC in Limbo
Washington’s top derivatives regulator on Thursday sought to reassure lawmakers the U.S. will punish fraud as concern mounts on Capitol Hill that oil, stock and prediction market players are illicitly trading on inside information from the White House.
The first congressional testimony by the current chair of the U.S. Commodity Futures Trading Commission, Michael Selig, comes a day after media reports that his agency is investigating a series of oil futures trades executed shortly before major policy shifts by President Donald Trump.
The remarks are also a nod to the sudden spotlight in which the comparatively low-profile agency – which currently only has one sitting member, Selig, rather than its normal five – now finds itself.
In prepared remarks for the House Agriculture Committee, Selig warned anyone engaged in fraud, manipulation or insider trading: “We will find you and you will face the full force of the law.”
Source: US will punish fraud and insider trading, derivatives regulator tells Congress
A federal judge on Friday blocked Arizona from continuing its criminal case against prediction market Kalshi, according to the ?Commodity Futures Trading Commission, which sued to prevent states from regulating the ?industry.
The CFTC announced the ruling in a press release following a hearing before U.S. District Judge Michael Liburdi in Arizona.
The agency said the court granted its request for a temporary ?restraining order barring the state from continuing to pursue criminal charges against ?CFTC-regulated designated contract markets.
“Arizona’s decision to weaponize state criminal law against ?companies that comply with federal law sets a dangerous precedent, and the ?court’s order today sends a clear message that intimidation is not an acceptable tactic ?to circumvent federal law,” CFTC Chairman Michael S. Selig said in a statement.
Kalshi attorney Robert Denault praised the ruling in a social media post, saying “federal law is supreme” under the U.S. ?Constitution.
Source: US judge blocks Arizona criminal case against Kalshi at CFTC’s request | Reuters
The FBI has labeled a recent data breach, which reportedly targeted an FBI surveillance system, a “major incident” and notified Congress about the cyber intrusion, the agency confirmed to The Hill on Friday.
“The FBI identified anomalous activity on an unclassified network and quickly leveraged all technical capabilities to remediate the incident,” the agency said in a statement. “It was determined the access was obtained through a third party and constitutes a major incident under the Federal Information Security Modernization Act (FISMA).”
“The FBI is following the required steps under FISMA, including notifying Congress, and remains focused on countering nation-state and cybercriminal activity,” it continued.
Several outlets reported that China-linked hackers are suspected of being behind the breach.