Acting CFTC chair discusses future of crypto regulation under Trump
The Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline Pham sits down with Yahoo Finance executive editor Brian Sozzi at Coinbase's State of Crypto Summit to speak more on digital asset regulation under the Trump administration, protecting investors from fraud, and the legitimacy of prediction markets.
Pham previously served as the CFTC commissioner from April 2024 until January 2025. President Trump's nominee for CFTC chairman, Brian Quintenz, has yet to be confirmed.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
Well, Bitcoin briefly bounced back today following remarks from President Trump at Coinbase's State of Crypto summit. In a pre-recorded message, Trump touted himself as the first crypto president and promised to make the United States a global leader in crypto. Yahoo Finance executive editor Brian Sai had the chance to sit down with Commodity Futures Trading Commission Chairman Caroline Pham with what could be ahead for the crypto industry and the future of the CFTC with upcoming chairman Brian Quintes. Take a listen.
I'm so excited for Brian and for him to come and bring his leadership to the CFTC, and that's exactly why I wanted to make sure that we were able to do that spring cleaning and make sure that Ryan is able to hit the ground running when he comes in as permanent chairman, hopefully very soon. So I think it's going to be fantastic, you know, he's had a very clear record as a commissioner that speaks for itself, and I'm looking forward to it.
The CFTCmight get more responsibility for regulating digital assets under Brian.What do you say to the crypto balls that would say things are going to be easy sledding regulatory wise over the next 4 years or under the Trump administration? Is it be careful what they wishfor?
Uh, there is no easy street for anybody, and the regulators aren't easy. So just because we are pro-innovation and pro-growth does not mean that you're going to be able to get away with breaking the law. And this is where I'm talking about not twisting the law to criminalize an asset class or a technology, but I'm talking about.Lying, cheating, and stealing. I gave a speech in 2022 where I said, there's, you, you can never commit fraud. Never. You can never steal from people. You can never lie to people. You can never cheat victims, right? And so that's what I've been pleased we've been able to do is end the regulation by enforcement decisively.And be able to refocus our limited resources, time and attention on catching fraudsters and scammers in our markets, which we have done for decades. That's always been our core mission is to prevent fraud, manipulation and abuse in our markets and to help victims. You know, a lot of times the CFTC fraud enforcement actions that were actually unrecoverable, right? We were going after fly by night websites.In foreign countries where we knew from the beginning we were never going to be able to recover any money for victims and they weren't who were these victims in the first place we never had any of that identified, but we'd say, oh look, it's a $500 million judgment. But that's just on paper. We didn't actually help anybody. There's plenty of poor people out there, people who have been taken advantage of, people who have been unfairly treated, they've been victimized, they've been scam.They're here in the United States and we need to be stepping in and using our authorities to make sure that they're getting actual recoveries. So that's actually one of the KPIs that I put into place is to measure the actual recoveries that we've gotten and what's been distributed to victims, not just looking at a big dollar sign of a, you know, fictional judgment that we'll never collect.
Along those lines, you also said on your panel, and I want to get your thoughts a little more on this.We have to uberize crypto. What did you mean by that?
So one of the things that people have been really concerned about, right, is that the, uh, the last administration, um, particularly with the SEC and the CFTC really went beyond what the law says and what the statute says. Many of my dissents as a commissioner on our enforcement actions pointed out how we were reinterpreting.Existing laws that have applied to the Doritos markets to futures and to swaps for decades, and this applies to the traditional markets. I'm not even talking about crypto. I'm talking about the interest rate swap market, the biggest, deepest, most liquid rates market in the world. I'm talking about the FX market. These things are critically important for companies all over the world and American companies to manage their risk associated with being multinational corporations, with makingPayroll and however many different currencies and however many different countries around the world, um, for the US government as well. So when we start to change the rules for actual, uh, the 700 trillion notional global dirdos markets because we're trying to be creative and um flex it to go after, uh, what we perceive to be a bad or evil.You know, crypto or or blockchain, that is really breaking the fabric of our global markets. I feel this so strongly, and so that's why I've had all those assets. All of those things were the existing laws on the books. That's our existing statute, those are the existing rules. The last administration ignored that. They ignored it to go and pursue novel enforcement theories, not.Caring about the unintended consequences of what that would do for the global economy and for global markets. So that's why many of these staff letters that I talked about have focused on restoring the well settled legal precedents, how the CFTC has applied and interpreted the law for decades to restore that regulatory clarity. So what does that mean? That means no matter what.The law says somebody in the future can come along and ignore it. How do you make sure that that doesn't happen? And, uh, one of the things I said on my panel is that when something becomes, uh, so big, so accepted, so part of our lives, you can't really take it away then. The public, the people, voters, they won't let you. And so that's what I meant because, you know, a lot of people tried to fight Uber.But everybody had Uber in their pocket. People liked Uber. Uber did a lot of things to revolutionize the transportation industry.And so even when people tried to uh ban Uber, they could. And so that's what I think is actually if you want to talk about how do we make sure that crypto never gets uh unfairly criminalized as just a concept, as a technology. I'm not talking about, um, again, fraud. Fraud is always illegal.Those are criminals that deserve to be caught and punished and held accountable, so that's not what I'm talking about, talking about just as a concept or as a technology trying to criminalize them. The way that you do that is by bringing it to the people, and the people will speak and voters speak.
Before I let you go, the people have also spoken, and they seem to like prediction markets. Now I've talked to Robin UCO Vladov numerous times, and he has told me we want to get big into prediction markets.Cow is already big in prediction markets. Should these markets exist?
Prediction markets have existed forever. If you want to think about what some of the first futures contracts are actually about, it's about predicting the weather. If you're a farmer, it's really important that you know if it's gonna rain or not rain.So prediction markets have existed before, you know, our current organized futures markets ever did. This goes back, I'm sure hundreds, thousands of years, maybe even just imagine when the world was a barter economy and what people were doing back in the day, so.They exist. They're real, right? And, uh, it's precisely because of things like weather derivatives that we've always had these prediction markets and, uh, in CFTC, um, regulations. Um, we, you know, we call them event contracts, uh, to use more of a term.Art. And so what I think is super informative and about the value of these markets and why they're important and why I try to reopen uh the comment period on a very thoughtful 2008 concept release. So the CPC has been looking at this like for 30 years, right?Because the first no action letter that the CFTC did around prediction markets was actually in the 90s and then we did this concept release in 2008. Now, unfortunately, I don't have a majority on the commission and sadly, you know, due to partisan reasons, just reopening a comment period to get feedback.From the public, right, from all members of the public who could have weighed in and said, do they think these things are good or bad, and what are the important considerations that we need to think about as regulators to be responsible about this innovation that got blocked, so I wasn't able to do that. That's that's very unfortunate, but anyhow.These, um, the 2008 comment letters really focused on the information value.Uh, of prediction markets, right? You're, they're, they're information markets. What's the most valuable commodity in the world, particularly if you look into the future and you think about Gen AI. The most valuable commodity in the world is probably information, real information, true information. So if you can use market forces, the self-policing, self enforcing market mechanisms to divine what is real and what is not, that's what an information market does. And I think one of the key aspects.Look at in the CFTC's statute is that the national public interest, which is very clear, Congress very clearly laid out a public interest for us, it is to have these uh national markets that provide, uh, price risk management, price discovery, and price dissemination.And that's exactly what markets do. Markets use pricing mechanisms of the markets to disseminate information. Every time you look at a stock price, you have taken all of the information available about that company, about its revenues, its cash flows, its product, its management, its strategy, its capital investments, the entire, you know, chapter and verse, A to Z of that company is expressed through its stock price, through the power of markets. So it's the same thing.
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