(Trixpoint) — Brian Quintenz, President Donald Trump’s pick to lead the US Commodity Futures Trading Commission, faced conflict-of-interest scrutiny from Democratic senators over his roles in the crypto industry and prediction markets — two prominent areas in this administration.
Congress is considering granting the agency more authority over digital asset regulation, a market Quintenz knows well as a lobbyist for the crypto arm of venture capital fund Andreessen Horowitz. He will resign if confirmed, he told lawmakers at his Senate confirmation hearing on Tuesday.
“Congress should create an appropriate market regulatory regime to ensure that this technology’s full promise can be realized, and I am fully prepared to use my experience and expertise to assist in that effort as well in executing any expanded mission should legislation pass into law,” he said.
Quintenz also faced questions about his ability to police prediction markets — an emerging market for the CFTC — given his seat on the board of a company that waged a long-running legal battle with the agency.
“I hope you can appreciate that there will be some real questions to your independence in that role,” Senator Cory Booker, a New Jersey Democrat, said.
The former CFTC commissioner serves on the board of directors of Kalshi Inc., the prediction markets platform that lets users place bets on topics as diverse as the winner of the French Open and whether Sabrina Carpenter will have a No. 1 hit this year. If confirmed, Quintenz said he will resign from the firm.
Kalshi and the CFTC clashed over the legality of allowing Americans to bet on the outcomes of elections, but the agency in May asked a court to
settle its fight
with the firm. Trump’s son, Donald Trump Jr., is
an adviser
to Kalshi.
The potential expansion of prediction markets raises concerns for Senator Adam Schiff, who said Native American gaming operators could get elbowed out by CFTC-blessed national platforms that operate as derivatives exchanges. The California Democrat said placing wagers on the outcome of a sporting event “looks like gaming, smells like gaming, sounds like gaming.”
Quintenz said he believes federal laws laying out the CFTC’s authority are clear that events which have commercial, financial or economic consequences qualify as commodities. He said if there are conflicts, it is “best resolved through Congress.”
Quintenz also pledged to reschedule a public forum on prediction markets that the CFTC had scheduled for the spring but canceled without an explanation.
The CFTC oversees the multitrillion-dollar derivatives market, financial products that help businesses hedge against price swings in everything from corn to cocoa to foreign currency. The agency’s powers could expand if Congress passes legislation to regulate the crypto market, with the CFTC potentially overseeing what’s called spot markets for Bitcoin and other digital assets that don’t qualify as securities. A House bill calls on the CFTC to work with the US Securities and Exchange Commission on joint rulemaking to hash out details.
Quintenz told lawmakers the agency would likely require additional funding and staff to meet any new mandates.
“To the extent that new authorities come to the agency, I think there are ways that we can make every taxpayer dollar spent the most efficient way possible, but I would anticipate that new resources would likely be needed,” he said.
Quintenz, who served as a CFTC commissioner from 2017 to 2021, is set to helm an agency in
upheaval
. Two commissioners departed at the end of May and the two remaining — Acting Chairman Caroline Pham and Commissioner Kristin Johnson — are planning their exits. The regulator is also dealing with the fallout from being
forced to drop
a high-profile fraud case against an online trading platform.
–With assistance from Lydia Beyoud.
(Updates with additional details throughout.)
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