The White House’s decision to pull its nominee to lead the Commodity Futures Trading Commission (CFTC) has left the financial regulator in an increasingly uncertain position, with just one remaining commissioner in place to tackle President Trump’s ambitious crypto agenda.
The Trump administration withdrew Brian Quintenz’s nomination from consideration last week after he became embroiled in a public spat with crypto billionaires Tyler and Cameron Winklevoss.
The development leaves acting CFTC Chair Caroline Pham alone at the helm of the agency with no replacement in sight, as the commission seeks to set crypto policy and faces down the prospect of greater responsibilities overseeing the industry with new legislation.
“It’s disappointing that we spent so much time with someone who I thought was a fantastic candidate in Brian Quintenz for the role of CFTC chair only to have the nomination pulled now over what seem to be political issues,” said Jake Chervinsky, chief legal officer at Variant Fund.
“That said, I think the most important thing by far is that we get someone through the Senate Agriculture Committee and into that seat as a confirmed chair,” he added. “And if it wasn’t going to be Brian, I’m glad that the White House is making the call now to move on from Brian and find someone else who’s up to the job and can get through the political process.”
The agency started the year with a full five-member commission. Former CFTC Chair Rostin Behnam, a Democrat, left at the outset of the new Trump administration, as is typical.
However, his fellow commissioners, Republicans and Democrats alike, shortly followed suit. Summer Mersinger and Christy Goldsmith Romero departed the CFTC in May, while Kristin Johnson announced her plans to leave the agency. She officially departed in early September.
Meanwhile, Pham has said she intends to leave once her replacement is confirmed. This appeared imminent after Trump nominated Quintenz, global head of policy at a16z crypto and a former CFTC commissioner, for the role in February.
Quintenz, whose nomination was widely cheered by the crypto industry, seemed poised to sail through the Senate. However, his confirmation stalled this summer, with the White House asking the Senate Agriculture Committee to delay a planned vote to advance his nomination in late July.
In September, Quintenz released a series of private messages between himself and the Winklevoss twins, accusing them of interfering with his confirmation after he offered a noncommittal response to their prodding about a CFTC inspector general complaint.
“I believe these texts make it clear what they were after from me, and what I refused to promise,” he wrote on the social platform X. “It’s my understanding that after this exchange they contacted the President and asked that my confirmation be paused for reasons other than what is reflected in these texts.”
Reports emerged in recent weeks that the White House was considering new candidates, before it officially withdrew Quintenz’s nomination. Michael Selig, chief counsel to the Securities and Exchange Commission’s (SEC) crypto task force, is now a leading contender, according to Politico.
“The fact that it’s dragged on for so long is not helpful to the CFTC because I think the industry and I’m sure the CFTC itself would like to move forward and get a confirmed chairman,” said Ian Katz, a managing partner at Capital Alpha.
“It’s hard to know exactly what the priorities are if you don’t have a chairman who’s going to be there for a while,” he added.
While the new chair’s priorities will likely reflect the White House’s views, the White House may not have opinions on more granular issues, Katz noted.
“The White House probably has overarching thoughts on the CFTC, and when you get into some of the more technical aspects, you want a chairman and you want commissioners to carry that stuff out,” he said.
The CFTC has long been a relatively low-profile agency in charge of overseeing derivatives markets. However, it has gained new stature as the likely home of much of crypto regulation going forward.
It will split oversight of the industry with the SEC — a division of labor that has long been unclear and is meant to be resolved by market structure legislation.
As Congress attempts to draw these lines, the SEC has taken charge on a number of crypto issues. While serving as acting chair in the first few months of the administration, Commissioner Mark Uyeda set about quickly closing investigations and dismissing lawsuits against crypto firms, as well as rolling back some Biden-era proposals.
Under Uyeda and current Chair Paul Atkins, the SEC has also issued guidance on several topics, from meme coins to tokenization.
The CFTC, which was largely quiet on crypto at the start of Trump’s term, began making some moves after the president’s digital asset working group released a series of recommendations in July.
Their report suggested that both agencies “use their existing authorities to immediately enable the trading of digital assets at the federal level.” In response, the CFTC launched its “Crypto Sprint,” while the SEC unveiled “Project Crypto.”
“That’s great progress,” Chervinsky said. “But there’s so much more for the CFTC to do under its current authority and rulemaking around issues like prediction markets and perpetual derivatives and 24/7 trading and decentralized finance.”
“Market structure is a whole other beast,” he added. “If market structure legislation were to pass, that’s going to massively expand the role of the CFTC, turning it into something very different from what it’s ever been before.”
The CFTC is expected to receive the “lion’s share” of regulatory authority over crypto in market structure legislation, Katz noted. This was the case in the Digital Asset Market Clarity Act, the House’s version of the bill that cleared the lower chamber in July.
The Senate, which appears set on forging ahead with its own legislation, is still a ways away from finalizing a bill.
Senate Banking Republicans have released a discussion draft, but their counterparts on the Senate Agriculture Committee have yet to put forward their portion of the bill. Meanwhile, Senate Democrats have laid out their framework for what they hope to see in the legislation.
The White House appears hopeful it can wrap up a market structure bill by the end of the year. However, if the government shutdown stretches on, it could push back this timeline.
In any case, the CFTC is poised to take on new responsibilities.
“I think in the short term, it’ll proceed a pace,” said Liz Davis, a partner at Davis Wright Tremaine and a former chief trial attorney at the CFTC, of the agency’s capabilities.
“But I think both inside the building and outside the building, they could really use knowing for sure who’s going to be in place going forward … Assuming crypto market structure legislation does get enacted this year, there’s going to be a lot of rulemaking that will require a lot of resources, knowledge, insight and expertise,” she added.
Experts agree that the agency can seemingly continue to function and make decisions with a single commissioner in place.
“My understanding is that there’s still a substantial number of staff at the CFTC that’s ready and very able to implement that law,” said Cheryl Isaac, a partner at K&L Gates who focuses on derivatives and commodities law.
Isaac underscored that market structure legislation “parallels existing CFTC regulations” in many ways.
“These are very familiar concepts to CFTC staff because it’s so similar to what we already see under the Commodity Exchange Act and CFTC regulations,” she added. “So I think that substantively, the CFTC will be ready to move forward, the staff is able to handle that.”
However, Katz added, “I think it’s pretty clear, you can’t get as much done as if you have a full commission. And it’s much harder to have an ambitious agenda when you don’t have the people.”
