“Using our enforcement authorities against DeFi protocols instead of providing clarity through notice-and-comment rulemaking risks driving responsible DeFi developers overseas to create businesses, jobs and economic activity away from the United States,” she said in a September statement after a CFTC settlement with Uniswap Labs. That leaves behind “the bad actors and criminals who are only interested in taking advantage of American citizens.”

Mersinger has powerful allies on Capitol Hill that include John Thune, a senator from her home state of South Dakota who was recently elected by his peers to serve as majority leader. She was Thune’s top aide from 2004 to 2016 and led the CFTC’s legislative affairs group during the first Trump administration.

Enforcement Critic

Pham, a former Citigroup Inc. managing director, is another possibility for CFTC chair. She’s likewise an advocate for financial innovation and a forceful critic of the agency’s enforcement. As a commissioner, Pham forged a role as a market-structure policy expert. She leads the agency’s Global Markets Advisory Committee, which has explored ways to regulate digital-asset technologies and markets.

Pham has supported concepts such as regulatory “sandboxes,” a sort of safe testing environment for both companies and agencies. For example, crypto firms could experiment with innovations within a limited time frame without fear of enforcement, while the CFTC calibrates its regulatory approaches.

A third possibility is Sterling, an attorney at law firm Milbank who was director of the CFTC’s Market Participants Division during the first Trump administration. The Republican has represented futures exchange Kalshi in its fight with the regulator over the ability to offer election bets.

Another contender is Kumar, a derivatives partner in Willkie’s corporate and financial services practice who has worked extensively on digital-asset issues in addition to traditional futures and swaps. He was a special counsel at the CFTC from 2009 to 2012. His party affiliation wasn’t available.

Sommers is a former Republican CFTC commissioner who served on the five-member body during the throes of the 2008 financial crisis and the implementation of the 2010 Dodd-Frank Act. She was a top lobbyist at the Chicago Mercantile Exchange and currently chairs the derivatives practice group at Patomak Global Partners, a consulting firm for the financial services industry.

Sommers was previously on the board of LedgerX, a CFTC-regulated futures exchange and clearinghouse that was owned by FTX, a crypto exchange that imploded in 2022. LedgerX was one of the few parts of the company to remain solvent and was later purchased by Miami International Holdings.

Rising Profile

The CFTC has long policed the market for derivatives, financial instruments that play key roles in the prices of everything from coffee to crude oil. Its powers expanded in the aftermath of the financial crisis, when complex financial swaps contributed to the economic meltdown.

Under President-elect Donald Trump, the CFTC’s powers could expand if Congress designates it as the primary regulator for Bitcoin and other digital assets that aren’t viewed as securities.

It’s unclear whether any new authority will come with a related increase in funding. The agency’s budget has been frozen for years. The SEC has roughly seven times the number of staff and a fiscal 2025 budget request of $2.6 billion that’s about seven times larger than that of the CFTC.

Trump, along with advisers Elon Musk and Vivek Ramaswamy, have pledged to cull the ranks of the federal workforce and to reduce regulation.

Unlike the SEC, the CFTC has long been more favorably viewed by both political parties. But the broader cost-cutting effort presents a wild card for the CFTC’s crypto prospects, said Gary DeWaal, former senior counsel and derivatives markets specialist at law firm Katten Muchin Rosenman.

“The CFTC is likely already understaffed and underfunded, and they’re going to pick up a brand new extra regulatory responsibility,” DeWaal said. “The question is how they do it.”

--With assistance from Megan Howard and Nancy Cook.

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