tl;dr
Rostin Behnam, Chair of the CFTC, announced his resignation on Trump's Inauguration Day. While he made some decisions perceived as hostile towards the Web3 and crypto industry, his biggest agenda item supported it. His departure, along with SEC Chair Gary Gensler's resignation on the same day, prese...
Rostin Behnam, Chair of the CFTC, announced his resignation on Trump's Inauguration Day. While he made some decisions perceived as hostile towards the Web3 and crypto industry, his biggest agenda item supported it. His departure, along with SEC Chair Gary Gensler's resignation on the same day, presents an opportunity for pro-crypto leaders in key regulatory positions. Behnam's absence may open the door for more pro-crypto regulations. Although Behnam did not directly mention the crypto industry in his resignation, his remarks hinted at a more conciliatory approach. With both Behnam and Gensler leaving, there is potential to reshape crypto policy in the US.
Behnam's actions during his tenure at the CFTC have shown both positive and challenging stances towards the industry. His desire for the CFTC to take over the SEC's role as the main industry regulator was a defining item on his crypto agenda. However, he is resigning instead of seeing this vision through. His departure allows Trump to choose a replacement, potentially an industry ally.
Rostin Behnam, the Chair of the CFTC, announced that he will resign on Trump’s Inauguration Day. Behnam made a few hostile decisions toward the Web3 and crypto industry, but his biggest agenda item supported it. SEC Chair Gary Gensler will also resign on the same day, presenting a huge opportunity for pro-crypto leaders in key regulatory positions.
Behnam declared his intent to resign in a CFTC press release, which he also posted to social media. Rostin Behnam is one of the biggest finance regulators in the US, and his absence might create an opportunity to push for more pro-crypto regulations. After he steps down from this role, he will fully exit the Commission at the beginning of February.
“As Chairman, I led the agency with a focus on identifying, assessing, and addressing risks within our regulated markets. Additionally, I took actions anchored in building consensus and towards establishing appropriate guardrails to minimize disruption, maintain a level playing field for all stakeholders, and fulfill our mission and purpose,” Behnam claimed. Although Behnam did not directly allude to the crypto industry, these remarks above seem far more conciliatory than when Gary Gensler announced his resignation.
Gensler has been the SEC chair since 2021, and he’s leaving office on the same day as Behnam. With these two figures gone, there might be a huge opportunity to reshape crypto policy in the US. Behnam has not necessarily been an anti-crypto figure during his tenure at the CFTC. Some of his actions have actually been positive for the industry. For instance, he demanded additional authority to fight crypto fraud in 2023. He then signaled he may need to crack down on fraud the following year. Also, the defining item on his crypto agenda was his desire for the CFTC to take over the SEC’s role as the main industry regulator.
“After years of begging Congress to regulate crypto and taking on FTX and others, he’s stepping down. His agency spent way too many resources chasing down crypto crimes—over 49% of their enforcement in 2023 was crypto-related,” Mario Nawfal posted on X (formerly Twitter). In July 2024, Behnam claimed that 70-80% of cryptoassets are not securities. Therefore, he argued the CFTC should have jurisdiction over them. Traditionally, the CFTC is much looser than the SEC, so the industry supported this notion. After Trump’s electoral victory, he reiterated these comments, signaling a willingness to cooperate on this issue.
However, for unclear reasons, Behnam is going to resign instead of seeing this vision through. One clue might be his battle against Kalshi and other election-related prediction markets, which are difficult to access in the US. In an interview with Bloomberg, Behnam characterized this as a losing battle and said that he didn’t want the CFTC to become an “elections cop.” By tradition, no more than three of the five CFTC Commissioners can come from the same political party. Behnam is one of three Democrats, so Trump can choose any qualified candidate from either party to replace him. Whoever he chooses, it seems safe to assume it will be an industry ally.