The U.S. Commodity Futures Trading Commission (CFTC), long considered one of the financial sector's key watchdogs, is facing a severe internal crisis. An investigation by The New York Times, based on internal memos, agency documents, and interviews with current and former officials, points to a significant compromise of the regulator's independence.

According to the gathered materials, CFTC leadership systematically intervened in the work of career specialists, fast-tracking license approvals and blocking scrutiny of specific market players.

Three Cases That Sparked Internal Protest

Career investigators and analysts within the commission repeatedly flagged risks and attempted to initiate proceedings across three main areas:

  1. Crypto.com – Agency experts raised serious concerns regarding insufficient measures to protect retail user funds.
  2. Polymarket – Internal CFTC teams were preparing to inspect the platform over suspicions of market manipulation and non-compliance with customer identification rules.
  3. Gemini Titan – This subsidiary of the Gemini exchange received regulatory approval on an expedited schedule, despite formal objections from staff who warned of potential fraud risks.

Financial Ties and Internal Sidelining

The NYT report correlates these stalled investigations with the commercial interests of individuals close to the current U.S. administration:

  • The Polymarket platform is backed by 1789 Capital, a venture firm co-founded by Donald Trump Jr.
  • The Crypto.com exchange operates as a major partner of Trump Media.
  • Gemini and its founders actively support the American Bitcoin project, championed by Eric Trump.

Efforts by CFTC staff to pursue these cases were met with administrative pushback. Specialists handling these files were removed from their duties, placed on mandatory leave, or subjected to internal performance reviews, ultimately leading to the departure of several key personnel.

The Shift in Enforcement Data

The shift in the regulator's policy is underscored by official enforcement figures across different administrations:

  • Under the Biden administration, the CFTC initiated over 80 active cases against crypto industry participants.
  • Following the transition to the second Trump administration, the agency opened only 2 cases.

This near-total halt in enforcement actions has provided the U.S. digital asset sector with an environment free from regulatory pressure.

Market Implications

These developments have divided financial experts. Industry proponents view the reduction in regulatory pressure as a green light for rapid business growth, unburdened by heavy administrative barriers and fines.

Conversely, consumer protection advocates and institutional investors warn of a dangerous precedent. Suspending independent oversight for select companies reduces market transparency and shifts long-term systemic risks directly onto retail participants.