| Wall Street’s top derivatives watchdog has long been overshadowed in the financial regulation landscape despite overseeing a massive swath of trading in everything from futures and swaps to election betting. Now the Commodity Futures Trading Commission is primed to take center stage in Donald Trump’s Washington. The president-elect has wasted no time building out his government in the nine days since winning back the White House. And with speculation swirling about who might lead the CFTC under Trump, those under consideration are starting to weigh what direction they think the regulator needs to take as it enters a new era — potentially with a much larger remit. “It’s really an important moment for the agency to meet the market [and] meet the people where they’re at, understand what’s going on and what, if any, role the government can play that would be sensible and helpful,” said Josh Sterling, a Milbank partner who, according three people familiar with the transition, is a contender for chair. Others in the mix to lead the CFTC include current Commissioners Summer Mersinger, a former top aide to Sen. John Thune, and Caroline Pham; former commissioners Jill Sommers and Brian Quintenz; and Willkie Farr & Gallagher Partner Neal Kumar , according to the people, who were granted anonymity to speak about the candidates. Sterling told MM that he had no comment when asked about his candidacy. Mersinger, Sommers, Pham and Kumar also declined to comment. Quintenz did not respond to a request for comment. “President-Elect Trump is making decisions on who will serve in his second Administration,” Trump-Vance Transition spokesperson Karoline Leavitt said in a statement. “Those decisions will be announced when they are made.” The CFTC has long taken a back seat to the much-larger Securities and Exchange Commission. But the next CFTC chair may have the chance to usher in new rules that could greatly expand the regulator’s reach across the financial markets. They will, for instance, likely be tasked with helping usher in a new regulatory regime for the $3 trillion cryptocurrency market should lawmakers pass bespoke legislation for the industry. The crypto lobby has pushed for years to give the agency new power to police digital assets directly rather than just derivatives. The regulator will also need to resolve still-unfolding legal debates over what types of products can trade on betting markets. And those are only two pieces of the vast markets that the CFTC oversees — and relatively small ones at that. For Sterling, who served at the agency during Trump’s first term, the CFTC is “well-positioned” to handle more authority in the crypto market once it has congressional authority. (“You can’t just fashion a new regime out of something old, whole cloth,” he told MM.) As for the betting markets, Sterling said the CFTC needs to “get out of the business of calling balls and strikes on which products it seems to like and which products it doesn’t.” Sterling is currently representing betting market operator Kalshi in its ongoing legal fight against the agency. Still, Sterling added that the regulator should also “focus on getting back to some of the basics.” That includes more public meetings and renewed attention toward the greater derivatives markets, he said. “We need to see agencies focus more on their broader mandates, with a broader view of their work and focus less on specialty issues,” Sterling said. “There’s been a lot of focus on [carbon markets] and there’s been a lot of focus on election markets. And those are important developments, but they’re quite small. You need to take a look at the bigger picture.” IT’S THURSDAY — Are you working on SEC policy or personnel for the Trump transition? Let’s talk: dharty@politico.com. And, as always, send suggestions and tips to ssutton@politico.com and @samjsutton.
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