CFTC Strengthens Leadership as Congress Weighs Expanded Crypto Oversight

Source: CoinTribune Original Title: CFTC Strengthens Leadership as Congress Weighs Expanded Crypto Oversight Original Link: https://www.cointribune.com/en/cftc-strengthens-leadership-as-congress-weighs-expanded-crypto-oversight/ The US Commodity Futures Trading Commission (CFTC) is strengthening its leadership as it prepares for a potentially expanded role in overseeing digital asset markets. Chair Michael Selig has appointed two senior advisers, signaling the agency’s focus on crypto regulation as lawmakers consider legislation that could grant the CFTC broader authority over the sector.

Key Developments

• New CFTC advisers bring crypto custody, blockchain, and regulatory expertise as the agency prepares for expanded oversight.
• Appointments signal CFTC readiness for broader digital asset regulation as Senate lawmakers consider shifting market authority.
• CFTC relies on senior advisers amid leadership vacancies, with Michael Selig serving as the agency’s sole commissioner currently.
• Regulatory coordination challenges persist as CFTC and SEC policies evolve alongside shifting national political priorities.

Crypto Custody Experience Takes Center Stage in New CFTC Appointment

One of the appointees, Michael Passalacqua, brings direct experience in crypto law and policy. In a notice released Tuesday, Selig announced that Passalacqua will join the commission as a senior adviser.

He previously worked as an associate at Simpson Thacher & Bartlett, where he advised on financial regulatory matters involving crypto assets and blockchain technology. Earlier in his career, Passalacqua served as assistant general counsel at a crypto-focused capital markets firm, working on regulatory compliance and transaction-related issues.

At Simpson Thacher, Passalacqua helped draft a legal letter that ultimately led the Securities and Exchange Commission to issue a no-action position on crypto custody. That guidance allowed state-chartered trust companies to serve as crypto custodians without facing enforcement action.

In September, the SEC’s Division of Investment Management reaffirmed the position, saying it would not recommend enforcement actions against advisers using such trust companies for custody services.

Leadership Moves at CFTC Reflect Push for Broader Regulation

The CFTC chief also appointed Cal Mitchell, a former US Treasury Department official, as a senior adviser. Together, the appointments reflect the CFTC’s effort to bolster its expertise as it prepares for a possible expansion of its mandate under proposed Senate legislation.

The appointments highlight several broader trends:

• An emphasis on crypto and blockchain regulatory experience.
• Preparation for expanded digital asset oversight.
• Alignment with pending Senate proposals affecting market supervision.
• Increased reliance on senior advisers amid leadership vacancies.
• Ongoing coordination challenges among US financial regulators.

Selig said the agency is actively preparing its regulatory framework for future market developments. Lawmakers are weighing bills that would give the CFTC authority over spot crypto markets—an area that has long operated under regulatory uncertainty.

Similar themes have emerged at the SEC. The SEC has indicated alignment with current digital asset policy priorities. Analysts, however, caution that shifting political dynamics could alter that approach.

Selig, who was nominated after the resignation of former acting Chair Caroline Pham, is currently the CFTC’s only serving commissioner. With no new nominations announced to fill the remaining seats, leadership responsibilities remain concentrated at the top as the agency moves forward with its crypto oversight efforts.