监管失守：CFTC与特朗普家族的加密生意

Original Authors: Sharon LaFraniere, David Yaffe-Bellany, The New York Times

Original Compiled by: Saoirse, Foresight News

Last fall, a battle of interests quietly unfolded within an obscure federal agency. Three companies linked to the Trump family's business empire sought approval from the U.S. Commodity Futures Trading Commission (CFTC) to expand their operations in the highly popular prediction market sector.

The prediction market is now a rapidly growing segment of the agency's regulatory portfolio. Americans can place bets on a wide range of events here, ranging from the color of the tie President Trump will wear next to whether the U.S. will take over Cuba. This market holds enormous commercial potential, but the operating methods of these companies have also sparked considerable controversy.

The agency's senior career officials had concerns: they suspected that Crypto.com had failed to treat small-stakes users fairly; they believed Polymarket's anti-fraud protection system had loopholes; and a third company — a subsidiary of the cryptocurrency firm Gemini — had not even passed the compliance reviews required to begin operations.

Multiple people familiar with the matter, who spoke on condition of anonymity for fear of retaliation, said that despite internal objections, the then-acting Chair Caroline D. Pham and her chief legal counsel intervened to help these companies achieve their goals.

By Christmas Eve, the agency suspended two senior managers who had questioned these companies, barred them from the office, and launched internal investigations against them. Three other senior officials responsible for cryptocurrency-related enforcement work suffered the same fate, as the crypto industry is also closely tied to the Trump family.

These officials were never told what they had done wrong. But current and former employees said in interviews that the incident sent a clear message to all agency personnel: Do not cause trouble for these industries.

An investigation by The New York Times reveals that the suspension of the officials involved is just one example of how this core agency, responsible for regulating a niche area of finance, has been repeatedly overpowered by the large interest groups it is supposed to supervise.

The investigation found that over the past 16 months of the Trump administration, the Commission has continuously reduced its workforce, purged senior career officials, sharply curtailed enforcement actions against the cryptocurrency industry, and facilitated operations for prediction market companies in every possible way.

The deep ties between the Trump family and the cryptocurrency and prediction market industries are a major reason for the significant weakening of the agency's functions. The Trump family has amassed a fortune by issuing its own digital currency and has also entered into business partnerships with several prediction market operators.

Several senior figures driving the transformation of the Commission themselves have financial interests in these industries. After leaving her post, Caroline D. Pham joined a cryptocurrency company that partnered with Polymarket; her chief legal counsel, Brigitte Weyls, was hired by a prediction market company whose operational application she had previously helped advance.

The current Chair, Michael S. Selig, 36, previously served as a corporate lawyer for several cryptocurrency companies and was deeply involved in prediction market-related business. Appointed by Trump and a member of the Republican Party, he is currently the sole commissioner of the agency, as the President has left the other seats vacant.

This extremely unusual personnel arrangement gives Michael S. Selig unilateral power to file lawsuits, enact new regulations, and fully oversee these two industries at the core of the Trump business empire.

White House spokesperson Davis Ingle stated: "Every decision President Trump makes is in the best interest of the American people, and there is no conflict of interest involved."

The shift in the agency's stance also confirms how the Trump administration has forced originally independent regulatory bodies to bend to its will, similar to changes seen at the U.S. Securities and Exchange Commission. Now, both agencies agree with the President's view that past regulators were overly harsh in punishing various industries.

Gretchen Lowe, who spent 30 years at the agency and retired last year from a senior enforcement position, said: "I've served under multiple Republican and Democratic administrations. In the past, everyone believed enforcement had to be strict. This is the first time political factors have affected the CFTC so dramatically."

Caroline D. Pham and Brigitte Weyls did not respond to requests for interviews. However, Caroline D. Pham publicly criticized the agency's enforcement division last year for abusing prosecutorial power.

Polymarket stated that it has established comprehensive risk protection mechanisms; Crypto.com said it strictly complies with all federal regulations; Gemini did not respond. A CFTC spokesperson declined to comment on the treatment of the employees involved or the agency's handling of specific cases.

With regulatory power weakened, millions of people involved in cryptocurrency trading and prediction market betting, as well as the increasingly interconnected overall financial system, are exposed to greater risks. These two industries have long struggled to eradicate fraud and misconduct: the crypto space is rife with scams, and insider trading in prediction markets has become a persistent problem.

In an interview, Michael S. Selig stated that during the Biden administration, the Commission's enforcement actions were excessive, taking even minor violations to court. He emphasized that the agency will now focus on prosecuting major illegal activities and will not favor any party.

He said: "Whether it's cryptocurrency or other areas, once fraud, market manipulation, illegal operations, or insider trading occurs, our enforcement division will be vigilant and fulfill its duties."

However, this tough talk starkly contrasts with the agency's actual enforcement record during Trump's second term. To date, the Commission has filed only two digital currency-related cases, both targeting individual operators, without taking action against any major cryptocurrency companies.

In contrast, during the Biden administration, more than 80 related cases were filed, either in civil courts or through administrative channels. Even during Trump's first term, before his family heavily ventured into the cryptocurrency industry, the Commission handled over 20 related cases.

In the regulation of prediction markets, faced with legal disputes over industry compliance, the Commission has transformed from a regulator into an industry ally. Since Trump's second term began, the agency has filed only one case, which involved an individual accused of insider trading.

The CFTC was originally established mainly to regulate misconduct in agricultural markets like pork bellies. Now, its regulatory responsibilities are expanding, yet its enforcement efforts are continuously retreating.

Prediction markets, now developing rapidly, fall under speculative financial transactions and are within the agency's regulatory scope. The total trading volume of the two major platforms for the entire year of 2025 was $50 billion, while this year, trading volume in just March and April alone reached that level.

The White House is currently promoting legislation to further expand the Commission's regulatory authority, giving it more oversight responsibilities in the cryptocurrency field.

Meanwhile, the Trump administration continues to cut agency staff. The department was already lean, with a peak of about 760 employees in 2015. By March this year, the number of on-duty employees had dropped to about 550, the lowest since the 2009 financial crisis low point.

Cryptocurrency Sector: A Full Retreat in Enforcement

In February 2025, a month after Trump took office, several lawyers at the CFTC were enjoying the Presidents' Day long weekend. Some were relaxing in white ski chalets in a Vermont ski town, while others were attending classical music concerts in New York.

A sharp ring of a mobile phone suddenly interrupted their vacations. The caller was Brian Young, head of the agency's enforcement division, conveying an order from Caroline D. Pham.

Caroline D. Pham, 45, had interned at the agency early in her career, has a broad network of contacts, and has long shuttled between government and the financial industry. In 2022, when a Republican seat opened on the bipartisan commission, President Biden appointed her as a commissioner.

After Trump promoted her to acting chair, she acted boldly and often posed for photos with executives from the industries she regulated. The order she gave during this holiday was particularly unexpected and difficult to execute: instructing the legal team to withdraw the agency's lawsuit against the cryptocurrency company KuCoin.

For the already small commission, this was a highly significant case.

During the Biden administration, most cryptocurrencies were regulated by the Securities and Exchange Commission, which treats them like stocks and bonds traded on Wall Street. However, the technical nature of cryptocurrencies gave the CFTC regulatory authority over some speculative trading, including transactions in Bitcoin, the world's largest digital currency.

Previously, the Commission had ordered Binance, the world's largest cryptocurrency exchange, to pay a $1.35 billion fine, making it a landmark case in the industry. The lawsuit against KuCoin was also intended to be a major step by the agency to signal its strict attitude towards regulating cryptocurrencies.

KuCoin, headquartered in Seychelles, had recently pleaded guilty in a lawsuit filed by the U.S. Department of Justice, agreeing to pay a fine of nearly $300 million. The DOJ accused the platform of ignoring laws aimed at combating crime and preventing illegal transactions. Meanwhile, KuCoin had also agreed in principle to settle a CFTC lawsuit accusing it of operating without a license.

Caroline D. Pham did not have the authority to unilaterally withdraw the case; it required a majority vote from the commissioners. However, with two Democratic commissioners still in office at the time, her chances of success were slim.

Left with no choice, the legal team opted for a compromise: they renegotiated the settlement agreement and cited Trump's executive order in court — which called for a more accommodating approach to the cryptocurrency industry.

During the negotiations, KuCoin announced the listing of two new digital currencies issued by World Liberty Financial, a cryptocurrency startup owned by the Trump family. The launch of these new tokens significantly increased the family business's industry profile and helped it expand its user base.

The case dragged on until March of this year when the CFTC finally reached a settlement with KuCoin. The parent company of KuCoin was ultimately fined only $500,000, far less than the multi-million dollar penalty the legal team had initially estimated.

KuCoin issued a statement saying that listing World Liberty Financial's tokens was just a normal business move and had nothing to do with the lawsuit it was facing. A spokesperson for World Liberty Financial also stated that its digital currency has been listed on multiple exchanges.

According to official documents and former employees, the Commission has also dropped investigations into at least five other cryptocurrency companies, including late-stage reviews of a major exchange.

In the spring of 2025, Caroline D. Pham's team launched investigations into three senior enforcement officials handling cryptocurrency cases, creating an atmosphere of fear throughout the division. The three were Gretchen Lowe, Chief Legal Counsel and First Deputy of the Enforcement Division; Manal Sultan, Deputy Director of the Enforcement Division; and K. Brent Tomer, Chief Trial Attorney.

The official reason given for the investigations was vague, simply mentioning "improper handling of certain enforcement matters."

Subsequently, the government dismissed Manal Sultan and K. Brent Tomer, citing downsizing; two trial attorneys working on cryptocurrency cases were demoted, and Gretchen Lowe resigned.

Several former agency officials stated in interviews that Caroline D. Pham's actions were specifically targeting legal personnel handling cryptocurrency cases. Andrew Rodgers, a former trial attorney who left last year, said: "Someone has been deliberately sidelining enforcement staff working on major cryptocurrency cases."

Joe Konizeski, a former lawyer from the Chicago office, said he received orders twice to terminate investigations into cryptocurrency operators before being laid off last summer.

He commented: "The CFTC's attitude is essentially telling wrongdoers in the crypto space that regulators will no longer hold them accountable."

The President Steps In Personally

For Gemini, the retreat in regulatory enforcement came too late. In January 2025, just before the scheduled trial, Gemini reached a settlement, paying a $5 million fine. The agency had previously accused the company of misleading CFTC staff regarding a Bitcoin auction.

However, Gemini avoided further liability that could have arisen from this case.

Gemini's founders, Cameron Winklevoss and Tyler Winklevoss, are highly regarded by Trump. They are political donors, sponsors of White House events, have invested in a private club owned by Donald Trump Jr., and have also funded a cryptocurrency enterprise co-founded by another Trump son, Eric Trump.

In the settlement agreement, Gemini did not admit to any wrongdoing and pledged not to publicly claim the allegations were baseless. However, just five months later, the company filed a complaint with the agency's Inspector General, criticizing the case and the legal personnel involved.

Tyler Winklevoss posted this complaint material on the X platform, accusing: "These public officials abused their power, wasting millions of taxpayer dollars to file a meritless lawsuit against Gemini, solely to advance their own careers."

Sources say the Winklevoss brothers did not stop there; they also tried to use this complaint to influence the appointment of the Commission's top leader.

While Caroline D. Pham was serving in an interim capacity, Trump nominated Brian Quintenz to lead the agency in February 2025. Quintenz is a former commissioner and also a director of a prediction market company. However, in September, he announced via social media that his nomination ultimately fell through because he refused to commit to supporting Gemini's complaint against the Commission.

Brian Quintenz made public some private chat records, in which Tyler Winklevoss demanded that he make Gemini's complaint the highest priority, stating they would "be happy to personally inform the President of this matter."

Brian Quintenz wrote that after he refused to cooperate, the Winklevoss brothers complained to Trump. At the end of September, Trump formally withdrew his nomination.

At the time, a Gemini spokesperson declined to comment on the chat records. A White House spokesperson said the President only nominates individuals whose philosophy aligns with his governance approach and who adhere to an America-first vision. Michael S. Selig did not comment on Gemini's complaint.

Multiple Interventions in Regulatory Approval

Gemini had further demands pending.

Its subsidiary, Gemini Titan, had been trying to enter the prediction market since 2020 but had never received Commission approval. Last year, Gemini submitted another application to operate.

Last December, while staff were reviewing this application, they suddenly received a special memorandum signed by Brigitte Weyls, directly recommending its approval.

Under normal procedures, such approval recommendations are drafted by front-line staff and then submitted to the commissioners level by level, and the review was still ongoing at the time. Despite this, Gemini Titan's application was quickly approved.

According to people familiar with the matter, this was just the third case where Caroline D. Pham and Brigitte Weyls intervened consecutively, repeatedly favoring prediction market companies cooperating with the Trump family.

At the start of Trump's second term, Crypto.com had already obtained a license to operate a prediction market. However, a brief note in one of the company's public filings raised alarm among some staff members. They suspected that Crypto.com secretly gave privileges to large trading institutions, giving them an edge over ordinary sports bettors, without publicly disclosing this practice.

According to sources, Caroline D. Pham and Brigitte Weyls not only discouraged staff from continuing to investigate the matter but also excluded relevant personnel from communication meetings with Crypto.com.

Crypto.com's management declined to comment on the details of communications with the Commission, while stating that its operational rules are transparent, all users enjoy a fair environment, and its information disclosure is fully compliant.

Crypto.com is a close business partner of Trump Media & Technology Group, of which Trump himself is the largest shareholder. The two companies reached an exclusive agreement last October to jointly develop the prediction market business. Trump Media & Technology Group did not respond to requests for comment.

The most far-reaching events revolved around Polymarket. Over the years, this company has been repeatedly questioned by regulators for compliance issues. In 2022, Polymarket paid a $1.4 million fine to the Commission for allowing U.S. users to place bets without permission.

In November 2024, after the surge in betting related to the U.S. elections, old cases were brought up again. The Federal Bureau of Investigation raided the New York home of the company's founder, Shayne Coplan, and the CFTC simultaneously launched an investigation.

The Trump administration dropped both investigations in July of the following year. That same month, Polymarket acquired a company with the necessary compliance qualifications, using it to launch a new platform for U.S. users.

The following month, Polymarket submitted a new application seeking approval to accept bets through intermediary channels. While this model helps companies expand their customer base, it could also allow wrongdoers exploiting insider information to hide their tracks and evade regulatory scrutiny.

Less than two weeks after submitting the application, Polymarket announced an investment from 1789, a firm partially owned by Donald Trump Jr. Additionally, the company hired Donald Trump Jr. as an unpaid advisor. A spokesperson for Donald Trump Jr. stated that he was not involved in matters between Polymarket and federal regulators.

Last fall, even as the U.S. government experienced a roughly six-week shutdown, the Commission still convened staff to process Polymarket's application.

During a communication meeting between the two sides in November, Rahul Varma, the interim head of the market oversight division, and Rachel Berdansky, deputy director of the compliance division, raised questions about Polymarket's anti-fraud capabilities. Brigitte Weyls also made an unusual appearance at this review meeting.

The week Polymarket's application was approved, Rachel Berdansky was placed on administrative suspension and subjected to an investigation; she has since retired. By the end of last year, Rahul Varma was also forced out.

Vince McGonagle, the former head of the division who was previously reassigned for delaying the approval of Gemini's application, also left the agency after being suspended.

Last year, a large number of employees resigned successively, reducing the total agency staff by about a quarter, the largest annual turnover rate in nearly two decades. Faced with this staff reduction, a Commission spokesperson still stated that the existing personnel were sufficient to fulfill regulatory duties.

Caroline D. Pham and Brigitte Weyls subsequently left public office and joined companies in the industries regulated by the agency. A senior Commission official stated that both personnel moves complied with federal ethical standards.

In March of this year, Brigitte Weyls officially became General Counsel of Gemini Titan, the very company she had previously helped secure approval for. Caroline D. Pham stepped down as