As President Donald Trump’s first year winds down into his second administration, he finally secured permanent appointments to lead two of the most important U.S. crypto regulators: Mike Selig as chairman of the Commodity Futures Trading Commission and Travis Hill as chairman of the Federal Deposit Insurance Corporation.
The CFTC is poised to become a leading regulator of US crypto activity, especially if Congress completes legislative work to grant more specific crypto authority to the derivatives watchdog. The Senate on Thursday approved Selig and Hill in a package of dozens of other nominees by a vote of 53 to 43. Once sworn in, Selig will replace acting chairwoman Caroline Pham, who has led a series of pro-cryptocurrency policy initiatives while awaiting a permanent replacement at the agency.
Pham has long planned to join MoonPay, a US-based crypto infrastructure services provider, as chief legal officer and chief administrative officer when she leaves the agency, as CoinDesk reported last month.
When Selig, who has been working on crypto policy as an official at the Securities and Exchange Commission, takes office, some of the digital asset tasks already underway in the CFTC’s so-called “crypto sprint” include a push to include stablecoins in tokenized collateral and a rulemaking to insert blockchain technology into regulatory language across the agency. The agency has also encouraged regulated platforms to start issuing spot leveraged crypto products, with Bitnomial being the first to step forward and implement such an offering.
One of the complicating factors for Selig as he jumps into crypto work is the fact that the CFTC’s five-member commission has been allowed to shrink to a single member. Pham said he plans to leave as soon as Selig arrives, which will leave him the lone member of the commission. While that reduces friction over how easy it will be for you to institute policies, it could leave some uncertainty about legal vulnerability to challenges that your policies are being set properly.
And it will also come as Congress continues to work on a major bill to overhaul the agency’s powers and give it explicit authority over broader cryptocurrency spot trading. Such legislation already passed the House this year, but is now being worked on in the Senate, where the Senate Banking Committee may still hold a margin hearing on that effort before the end of the month, according to close observers of the negotiations.
At the FDIC, which will regulate stablecoin issuers and has a significant impact on how the cryptocurrency industry is banked, Hill has already been leading the agency as acting chairman. In that role, he has adopted a cryptocurrency-friendly stance.
“We undid the policy of the last few years,” he told lawmakers at a Dec. 2 hearing of the House Financial Services Committee, referring to a Biden administration-era stance in which banking regulators told bankers they needed approval from government supervisors before engaging in new crypto activities. “Banks are expected to manage safety and soundness risk, but are otherwise not prohibited from providing services to those industries.”
Hill has also taken a leadership role in addressing cryptocurrency industry complaints about so-called “de-banking” in which banks severed relationships with cryptocurrency companies and their executives, a situation that industry insiders and many of her Republican legislative allies say was encouraged by regulatory policy.
The absence of permanent leaders at the CFTC and FDIC remained two of the most glaring vacancies in crypto oversight under the Trump administration. He had already placed people at the Securities and Exchange Commission and the Office of the Comptroller of the Currency, as well as leadership at the Treasury Department. Trump has been undermining the Federal Reserve Board, where his nominee for vice chair of supervision, Michelle Bowman, took over in June. However, he is still waiting to replace Chairman Jerome Powell when his term expires next year.
Republicans in the Senate have resorted to an unusual approach of mass confirmation of Trump’s federal nominees. In the resolution that approved these two officials, 97 confirmation questions were attached to the same document, avoiding a traditional confirmation process in which the Senate evaluated each candidate individually.
Read more: Trump’s CFTC pick Mike Selig overcomes hurdles on path to confirmation vote
