CFTC Faces Tough Crypto Mandate With Fewer Staff, Inspector General Says

The Commodity Futures Trading Commission (CFTC) is critically under-resourced and understaffed to handle the burgeoning digital assets market, according to a recent assessment by the agency’s Inspector General (IG). The IG’s report warns that the CFTC’s growing regulatory mandate over crypto commodities, such as Bitcoin and Ether, is severely compromised by budgetary constraints and a deficit of specialized technological personnel.

CFTC Chairman Rostin Behnam has frequently petitioned Congress for increased funding and explicit statutory authority, arguing that the CFTC is the de facto regulator for much of the crypto space. However, the IG audit underscores that even the agency’s existing enforcement duties related to digital assets are strained because its current workforce lacks the specialized expertise necessary for monitoring decentralized finance (DeFi), conducting sophisticated blockchain analysis, and tracking cross-border cyber fraud.

The audit highlights that the agency struggles to compete with the private sector for tech talent, leading to high turnover among crucial IT staff and specialized legal advisors. These staffing deficits hinder the CFTC’s ability to effectively build out the surveillance infrastructure needed to prevent market manipulation and protect consumers in this novel asset class.

Should Congress move forward with legislative proposals that would grant the CFTC explicit and expanded authority over the entire crypto spot market, the IG concludes that the agency, operating at its present capacity, would be unable to meet the operational demands of such an expansive mandate. The IG urged Congress to prioritize dedicated funding increases for digital asset market oversight, emphasizing that the lack of resources poses a significant risk to market integrity.

Source: CFTC Faces Tough Crypto Mandate With Fewer Staff, Inspector General Says