By Lydia Beyoud, Nicola M White and Liam Vaughan, Bloomberg

Original translation: Luffy, Foresight News

In March, in a conference hall in Boca Raton, Florida, not far from Mar-a-Lago, Caroline Pham, acting chairwoman of the Commodity Futures Trading Commission (CFTC), stepped onto a neon-lit stage to deliver a speech commemorating the agency’s 50th anniversary.

Since 1975, when futures were primarily used by industrial companies and farmers, the CFTC has quietly overseen a market exceeding $500 trillion, with the explosive growth of financial derivatives and the emergence of cryptocurrencies. But Pham's visit wasn't about a polite recounting of the CFTC's achievements.

After a few pleasantries, Pham told attendees at the Futures Industry Association conference that CFTC lawyers were filing too many lawsuits, imposing excessive fines, and rushing to discipline well-intentioned companies without first establishing ground rules. She also said the agency had "internal governance" and "misconduct" issues that required "immediate corrective action."

In some ways, even as acting chair, Pham, a junior Republican on the five-member, bipartisan CFTC commission, was a surprising choice for the top job. A former Wall Street compliance officer turned cryptocurrency advocate with a prolific social media presence, she has drawn attention for publicly addressing problems within the agency and criticizing some staff members. "I am heartbroken by the extent to which the Commission has strayed from the Constitution," she wrote in one public statement. Another read, "This is not just regulation through law enforcement; this is arbitrary regulation." She also posted on LinkedIn, "I reiterate my call for mandatory CFTC employee training programs" to improve "foundational knowledge."

Personnel shake-ups and layoffs: chaos and suspicion within the organization

Now, seven months into what is generally considered a transitional role, Pham has already ousted several senior executives, overseen layoffs of at least 15% of the firm’s staff, citing a backlog, and closed a third of pending investigations. Her term was supposed to end this summer, with former CFTC Commissioner Brian Quintenz, President Donald Trump’s official nominee, expected to take over. But Quintenz’s confirmation process was stalled after a complaint from Tyler Winklevoss, co-founder of the crypto exchange Gemini, claimed the candidate had excessive conflicts of interest and wasn’t a true cryptocurrency supporter. The accusation was unexpected for someone who previously led global policy at a 16z. Quintenz, who also serves on the board of directors of the prediction market Kalshi, declined to comment for this article.

Cutting back on a rigorous financial regulator like the CFTC wouldn't necessarily spark the outcry that would accompany cuts to the Environmental Protection Agency, the Department of Education, or even the SEC. And the CFTC did face criticism for oversight during Pham's predecessor's tenure. But the role of this low-profile agency is crucial: futures and commodities are central to the global economy, driving trade in energy, food, and finance, and influencing the prices of everything from coffee to corn oil to gasoline. The 2008 financial meltdown was driven in part by the proliferation of complex derivatives, products that were subsequently brought under the CFTC's purview.

More than two dozen current and former CFTC insiders and industry insiders spoke candidly with Bloomberg Businessweek on condition of anonymity to discuss internal CFTC affairs. They said the CFTC's enforcement work has been slow, with only two of its five commissioners coming from opposing parties, making it difficult for the CFTC to conduct its key business. Some of these problems existed before Pham took office. Agency spokeswoman Taylor Foy said, "The problems are coming to light now because we are exposing them," and that all of Pham's criticisms are intended to help "the CFTC and its staff reach their full potential" and fulfill the responsibilities entrusted to her by the Trump administration. "Pham was never asked to 'stand by' while leading the CFTC," Foy said in a statement. "In fact, when she was appointed acting chair in January of this year, she was instructed to run the CFTC like the permanent chair."

As institutional responsibilities and potential market risks continue to grow, turmoil persists. New measures are being formulated that will allow cryptocurrencies to permeate every corner of finance, from Americans' retirement funds to Treasury coffers. Prediction markets like Kalshi and Polymarket allow investors to bet millions of dollars on the outcomes of real-world events like elections. Meanwhile, the president and his family are making significant inroads into the cryptocurrency space.

The CFTC has approximately 640 employees and a budget only one-sixth that of the SEC. Some worry that it will struggle to cope with its new responsibilities. "With the rapid development of new markets and technologies, we must have a regulator with the resources and expertise to protect consumers, prevent financial crime, and promote responsible innovation," said Dorothy DeWitt, former CFTC division director.

A White House spokesperson denied that the CFTC was in disarray, writing in a statement: “President Trump has prioritized ‘making the United States a global hub for cryptocurrency’ and has called for a reinvigorated Commodity Futures Trading Commission to play a greater role in achieving this goal. Acting Chairwoman Caroline Pham has done an excellent job advancing this work, and the Trump Administration is grateful for her leadership and dedicated public service.”

Pham, a veteran of several CFTC appointments, first became a commissioner in 2022. After taking over as acting chair in January, she fired the head of human resources. The official was investigating union allegations from 2023 that the CFTC allowed Pham to abuse and intimidate employees during internal meetings on law enforcement matters.

Pham denied any intimidation, and Foy called the NFFE complaint a "false and unfair" portrayal of "detailed and substantive discussions." "As a commissioner, some of my comments and questions to staff were not always popular," she said in a statement last year. "Telling the truth may be painful, but it is essential to governance and oversight to ensure accountability."

The CFTC cited a series of administrative failures in its dismissal of the HR director, including a failure to combat abuses of the agency's remote work policy and allowing "unlawful targeting of Republicans in violation of the First Amendment." Earlier this month, the agency announced a review of employee compliance with attendance requirements, citing a former employee who allegedly violated government policy by working remotely from abroad while serving as chair of the CFTC's National Telecommunications Organization (NTEU). The initial investigation into the NTEU complaint was never completed, but a law firm concluded in 2025 that commissioners were not bound by the agency's harassment policy and, in any event, that Pham had not violated agency regulations.

Pham also removed the agency's chief financial officer. According to people familiar with the matter, the two clashed over Pham's business travel requests and her request that the CFTC cover her commuting expenses between Washington and New York. Foy said in a statement that all of Pham's agency-paid travel complied with government regulations and had been approved by agency ethics officials, and that "the suggestion that the CFO was transferred because of a disagreement with her about travel is false." The personnel changes "are not personal, but rather address specific and ongoing concerns about CFTC programs, procedures, and the efficient use of taxpayer funds," Foy said. "Since assuming the role of Acting Chairman, Pham has made several personnel changes, which are common in new administrations, including the CFO position." The former head of human resources declined to comment; the former CFO did not respond to requests for comment.

Some senior agency professionals have accepted Elon Musk's government-wide offer of voluntary resignations. This follows a string of departures in the final days of the Biden administration, further weakening the agency's internal experience. Following a Supreme Court ruling paving the way for widespread federal layoffs, the CFTC announced 24 additional layoffs in July, spanning market oversight, enforcement, and data. Foy stated in a statement that these layoffs are "part of an ongoing restructuring effort to reduce unnecessary reporting lines."

The departures have been particularly severe in the Enforcement Division, which investigates everything from multibillion-dollar frauds like Sam Bankman-Fried’s FTX to common record-keeping violations. The agency’s fiscal 2026 budget request calls for a 30% reduction in the number of enforcement officers compared to fiscal 2024. Pham has also reorganized the division.

Pham, a former law enforcement intern, points to the department's handling of the My Forex Funds case as evidence of the need for overhaul. In 2023, the CFTC accused the online trading platform of being a Ponzi scheme and filed an asset freeze request that incorrectly characterized the company's payments to the IRS as an attempt to divert millions of dollars out of government oversight. When agency lawyers failed to properly correct the records, a judge dismissed the case, ordering the CFTC to pay nearly $3.2 million in sanctions and reimburse My Forex Funds' legal fees.

Following the ruling, Pham issued a statement calling it "reassuring" that the judge addressed her previous concerns about the CFTC bringing the case, and suggested it demonstrated the agency's deepest descent. "This case clearly demonstrates that the department has long harbored a culture of 'CFTC above the law,' where violations are justified simply because the CFTC is a government agency," she wrote. Following the case's failure, regulators suspended four Chicago-based lawyers and one investigator.

To clear the backlog of pending cases, Pham announced an initiative she called the "Enforcement Sprint" in a speech in Boca Raton, inviting companies to contact her within two weeks to seek reduced fines. The initiative positioned Pham as a Trump-style "dealmaker." In practice, however, the initiative has struggled to gain traction: despite nearly two dozen companies attempting to reach agreements, no deals have yet been announced. According to a person familiar with the matter, six "Sprint" settlements are pending with Kristin Johnson, the ranking Democrat on the committee. Johnson declined to comment.

In addition to the staff cuts, the CFTC has also scaled back spending on some tools used to investigate cryptocurrency trading, including canceling a contract in March. Foy said the cancellation was in response to government cost-cutting directives and that the agency had another service that could meet the same need.

Several interviewees described a pervasive atmosphere of resentment and suspicion at the CFTC's headquarters in Washington and offices across the country, fueled by layoffs and criticism. Some said lawyers were no longer willing to recommend cases or even request subpoenas. Foy called this claim "ridiculous." The resignation of three of the five politically appointed commissioners (who vote on sanctions and fines against companies) and the lack of replacements have exacerbated the agency's inertia. With only one Republican and one Democrat remaining in office, matters have reached a stalemate. "I can't get my bank records, I can't get my evidence. I can't do anything," one lawyer complained.

"Acting Chairman Pham is not responsible for any of the deadlock," said Foy. After Pham took over, Foy became the CFTC's spokesperson. He also said that internal agency analysis found that some field offices had reduced new case filings during the final year of the Biden administration, and that Pham had worked hard to support agency staff. "She recognized staff achievements and worked to address problems before they escalated," he said.

At the end of May, Brian Young, Pham's appointee to head the enforcement division, accepted a buyout after three months on the job. Young, who previously headed the agency's whistleblower office, sought to inspire staffers upon his departure, acknowledging that their work can be difficult and thankless even under the best of circumstances. "On your most difficult days, may you find solace in the fact that 'the nation needs you,'" he wrote in an email to colleagues. Young declined to comment. In June, the agency welcomed a new acting enforcement director, Paul Hayeck. "We still have the capabilities we once had," Hayeck said.

The data speaks for itself. Since Pham took office on January 20, the CFTC has announced only one new enforcement action. This compares to over 12 actions in the first six months of 2024 and over 24 in the same period of 2023. The agency has stopped fining cryptocurrency companies for registration violations, which had been the cause of numerous actions in previous years. Similar enforcement slowdowns have occurred at the SEC, the Department of Justice, and the Consumer Financial Protection Bureau. In his May executive order, Trump vowed to curb what he called the "ridiculous and unjust" practice of overcriminalization in American society.

Expanding regulatory responsibilities and resource constraints: Cryptocurrency regulation poses new challenges

The CFTC’s diminished powers come at a time when its responsibilities are poised to expand. In July, Congress passed a landmark cryptocurrency bill covering instruments like stablecoins. Another sweeping bill, the Clarity Act, has passed the House and is now before the Senate. If enacted, it would establish a comprehensive legal framework for the industry for the first time. However, critics like Massachusetts Senator Elizabeth Warren and former Democratic CFTC Chairman Timothy Massad argue that the legislation doesn’t go far enough to protect consumers, combat money laundering, or prevent conflicts of interest, and that it is riddled with loopholes. Warren called the bills a “handout” to an industry that “poured $230 million into the 2024 election.”

The Clarity Act defines most cryptocurrencies, including Bitcoin and Ethereum, as "digital commodities." This means that the CFTC will shoulder the bulk of the responsibility for regulating these markets, rather than the much larger SEC. However, it's unclear how much additional staff and resources the agency will need to handle this significantly increased responsibility.

“The CFTC is probably the most neglected and underfunded financial institution in the federal government,” said Carol Goforth, a professor at the University of Arkansas School of Law who studies digital asset regulation. “Does it have the capacity to handle all of this? Of course not.”

But former acting CFTC Chairman Walt Lukken, a Republican, said the agency "certainly has the legal authority and appropriate regulatory capacity" to "meet this challenge."

“Caroline is incredibly capable and intelligent and is doing her best to advance President Trump’s agenda,” Lukken said.

Meanwhile, the Trump family continues to increase its investments. To date, they have investments in cryptocurrency trading platforms, stablecoins, non-fungible tokens (NFTs), cryptocurrency mining, and various meme coins. According to Bloomberg, although Trump's assets are held in a trust managed by Donald Trump Jr., he has added $620 million to his wealth from this industry in the past few months alone.

“People in the cryptocurrency world didn’t like what he did,” said Massad, now director of the Digital Asset Policy Program at the Harvard Kennedy School. He called Trump’s decision to launch Meme Coin two days before his inauguration, which saw its value plummet 80% after he reportedly collected millions of dollars in fees, a “disgrace to the industry.”

"The president and his family have never had, and never will have, a conflict of interest," said White House spokeswoman Karoline Leavitt. "The media's continued attempts to fabricate conflicts of interest are irresponsible and only exacerbate the public's distrust of what they read."

Cryptocurrencies have long been relatively isolated from the broader economy, but this is changing. Lawmakers are pushing to include virtual currencies in the 401(k) retirement plans of ordinary Americans, while banks and asset managers, driven by fear of exodus, are announcing blockchain-related projects. Stablecoins backed by low-risk assets like Treasury bonds are connecting digital markets with mainstream markets. Trump has even issued an order requiring that cryptocurrencies seized by law enforcement agencies be included in digital asset "reserves."

Beyond cryptocurrencies, the CFTC recently approved large-scale prediction markets. For decades, Americans have been prohibited from using derivatives to bet heavily on real-world events like politics and sports, fearing they could encourage gambling or undermine democracy by giving insiders an incentive to profit from influencing outcomes. Kalshi (which hired Donald Trump Jr. as a special advisor in January) successfully challenged this rule in 2024, becoming one of the first exchanges to receive federal permission to list contracts on political events. Others have followed suit, ushering in a new era where Americans can bet millions of dollars not only on who will win the Grammy Awards, but also on who will leave the presidential cabinet first, Pete Hegseth or Tulsi Gabbard.

Several former CFTC officials testified that the agency lacked the resources to properly review the large number of new contracts listed weekly on the website by Kalshi and its competitors. Meanwhile, state regulators and Indian tribal leaders are pursuing legal action against Kalshi, alleging it circumvented jurisdiction by operating sports betting under the guise of derivatives trading. Kalshi denies the allegations.

Quintenz Appointment Deadlock: Uncertainty About the CFTC's Future

CFTC employees self-deprecatingly joke that the government hasn't appointed a permanent chairman because they've forgotten the agency even existed. If Quintenz's appointment is ultimately approved, he'll have a lot to deal with, not least boosting employee morale. But his appointment is far from certain.

This summer, the CFTC released a trove of internal emails in quick response to a Freedom of Information Act request. The emails showed correspondence between the agency and Quintenz and a potential staff member regarding recruitment, licenses the CFTC was considering, and public information about the status of litigation with Kalshi competitor PredictIt. Kalshi's CEO said Quintenz had not been involved in board matters since the end of last year; Quintenz's supporters said such inquiries were normal for a chairman who wanted to hit the ground running. But critics, including Winklevoss, seized on the emails, saying Quintenz had a conflict of interest and his appointment should be rescinded. The White House issued a statement in late July supporting Quintenz, but it was unclear when the Senate would vote on the matter.

According to Quintenz's ethics disclosure documents, if confirmed, he will leave the boards of a16z and Kalshi and divest his interests in both. During a Senate hearing in June, he pledged to appoint an internal "impartiality reviewer" and recuse himself from relevant matters where appropriate. This, however, could raise new questions for the agency.

Three commissioners have already resigned, with the remaining Democratic commissioner also about to leave, and Pham has announced his own departure. This leaves Quintenz likely with a one-man commission, more commander than chairman. Some analysts say this unprecedented situation won't necessarily constrain the agency's operations. Trump has already fired Democratic representatives from the Federal Trade Commission and the National Labor Relations Board, disregarding long-standing traditions of bipartisanship. When pressed by senators on whether he wants a full CFTC commission, Quintenz responded that while he values the opinions of others, "I'm not going to tell the president what to do."

Next year, the CFTC will take over new markets worth trillions of dollars and move to new offices on the outskirts of Capitol Hill, half the size and far less impressive than its current headquarters. The contract has been signed, but even with a reduced staff, the new offices will still be cramped under President Trump's order for all federal employees to return to work full-time. The complex is called Patriot Plaza.