CFTC Staff Cuts and Enforcement Decline Amid Crypto Market Boom

The Commodity Futures Trading Commission (CFTC) is facing scrutiny as its workforce shrinks and enforcement actions plummet, coinciding with a surge in trading volume within cryptocurrency and prediction markets. According to data from the U.S. Office of Personnel Management, the agency’s staff levels fell by 21% by the end of 2025 compared to the previous decade’s average, with a sharp 22% decline occurring between January 2024 and January 2025 alone.

Enforcement activity has dropped even more dramatically. Annual reports indicate that the CFTC initiated nearly 80% fewer enforcement cases in 2025 than the ten-year annual average. This reduction began shortly after President Donald Trump won the 2024 election, a timing that former CFTC enforcement lawyer Jeff Le Rich described as intentional.

“The Trump administration had run partially on a platform that it would be friendlier to the crypto industry,” Le Rich said. He noted that prior to the election, the agency had pursued fraud cases against major firms such as FTX, Celsius, Voyager, Gemini, and Mirror Trading, as well as the prediction market Polymarket. Le Rich alleged that after the inauguration, staff members who had worked on these cases were either forced out or left voluntarily to demonstrate goodwill toward the industry.

Joe Konizeski, a former CFTC enforcement lawyer with 26 years of experience, was among those dismissed in 2025. He stated that Acting Chair Caroline Pham instructed that all crypto-related cases be closed. “She said, ‘We’re closing all our crypto cases,'” Konizeski recalled. “And so, of course, everybody who had a crypto scam had to close it and any matter that was even marginally related to crypto ended up getting closed.” Pham, who departed the CFTC in December 2025 to join cryptocurrency company MoonPay, did not respond to requests for comment.

The impact extends beyond digital assets. Konizeski pointed out that staffing shortages also led to the dismissal of a foreign exchange fraud case against WorldWideMarkets Inc., which was accused of defrauding millions from users. “Fewer cops on the beat creates a real incentive to start engaging in fraudulent and deceitful behavior,” Konizeski said. “Enforcement is down and that means that there’s going to be more fraud.”

In August, CFTC Chairman Michael Selig celebrated the agency’s regulatory retreat at a White House event with crypto industry leaders. Flanked by executives like Coinbase co-founder Brian Armstrong, Selig declared, “The era of political lawfare, debanking and regulation by enforcement is over.” Selig, the sole remaining member of the normally five-person commission, holds unchecked power over the agency. Financial disclosures show he sold between $65,000 and $150,000 in Bitcoin before his appointment.

Former CFTC director Brian Young warned that the reduced headcount hampers the agency’s ability to create new rules for these expanding markets. “They need people to process these applications,” Young said, noting that the workload has grown significantly. In 2025, the CFTC approved six prediction markets—triple the historical annual average—and has authorized six more this year, with 18 additional applications pending.

The Government Accountability Office (GAO) is now investigating the staffing crisis following a request from Senator Elizabeth Warren of Massachusetts. Warren criticized the agency’s lack of resources and oversight. “It’s supposed to be out there regulating the market, but it doesn’t appear to be doing it and frankly, doesn’t appear to have the people to do it,” she told NPR. The GAO plans to initiate its probe in December.

CFTC spokesman Zach Fulton responded to NPR by stating the agency is on track to hire approximately 100 employees in critical areas by the end of 2026. Meanwhile, after Congress failed to pass a broader crypto regulation bill earlier this year, Selig announced that the CFTC will proceed with rulemaking independently to provide clarity in crypto asset markets.