A key government agency is dismantling efforts to regulate online betting markets and crypto as President Donald Trump and his family deepen their ties to the booming industries.
The Trump family’s growing footprint in crypto and prediction markets has translated into billions in new wealth, fueled by digital coin offerings and deals with prediction market firms.
Trump’s eldest son, Don Jr., is both an investor in Polymarket, through his investment firm 1789 Capital, and an adviser to Kalshi and Polymarket. The president’s publicly traded media company partnered with Crypto.com last October on what the firms called an exclusive prediction market venture.
At the same time, the Commodity Futures Trading Commission, a small agency that regulates those industries, has undergone a dramatic retreat from enforcement, and staffers say a series of firings sent a clear warning not to make life difficult for the companies they are supposed to oversee, The New York Times reports.
The CFTC is being led by a single commissioner, Michael S. Selig, a 36-year-old former corporate lawyer with ties to crypto firms and prediction markets, whom Trump appointed as chair in December.
Trump, 79, has left all four other board seats vacant, effectively stripping away the CFTC’s internal checks and balances and consolidating broad authority in the hands of its new chair.
Even before Selig’s appointment, his predecessor, Caroline Pham, undermined the CFTC’s oversight role to benefit powerful industry players connected to the Trump family, the Times reports, citing people familiar with the situation.
The agency’s transformation underscores how Trump, 79, has bent it toward the priorities of his own family and his billionaire friends.
“I’ve been through an almost equal number of Republican and Democratic administrations, and there was always a belief you had to have strong enforcement,” Gretchen Lowe, who spent 30 years at the CFTC and retired last year from a top enforcement job, told the Times. “This is really the first time that politics have affected the C.F.T.C. in such a dramatic way.”
In the 16 months since Trump returned to the White House, the CFTC has brought just two cases involving digital currencies and one involving prediction markets, with all three aimed at individual operators rather than major tech companies.
Meanwhile, the agency has abandoned at least five investigations into crypto firms and pushed out senior career officials who had handled crypto enforcement, the Times reports, citing government documents and former staff members.
“There was a sustained effort to oust enforcement staff who worked on some of the agency’s more significant cryptocurrency matters,” Andrew Rodgers, a CFTC former trial attorney who resigned last year, told the Times.
The seemingly deliberate hollowing out of the CFTC’s enforcement authority has created a direct upside for companies engaged in deals with the Trump family.
When CFTC staff raised concerns that Crypto.com—a close business partner of Trump Media & Technology Group—was giving large trading firms an edge over ordinary sports bettors without full disclosure, Pham urged them to drop the issue and later excluded them from meetings with the company, people familiar with the matter told the Times.
In another episode, Polymarket, which paid a $1.4 million fine to the CFTC under the Biden administration in 2022 for taking bets from Americans without its permission, requested permission to use intermediaries for bets, a move that could make it easier to hide insider trading.
Less than two weeks later, Polymarket announced a “strategic investment” from 1789, an investment firm owned partly by Don Jr., and named him an unpaid adviser.
While reviewing Polymarket’s request, Rahul Varma, the CFTC’s acting director of the market oversight division, and Rachel Berdansky, the deputy compliance director, questioned the strength of Polymarket’s anti-fraud safeguards at a meeting with the company last November, according to the Times.
The agency subsequently put Berdansky on administrative leave and under investigation. She has now retired, while Varma has also been ousted.
Pham left the agency in January to take a job at a crypto company that works with Polymarket.
The CFTC, the White House, the Trump Organization, Polymarket, and Crypto.com did not immediately respond to requests for comment.
