CFTC at a Crossroads: Enforcement, Innovation, and the Road Ahead

Partner Rob Schwartz recently participated in the panel titled What’s New at the CFTC and FERC? at the Futures Industry Association’s (FIA’s) 2025 FIA Commodities Conference. The panel discussion focused on the Commodity Futures Trading Commission’s (CFTC’s or the Commission’s) agenda under the acting chairman, recent developments reflecting an agency seeking balance between regulatory efficiency, market modernization, and institutional integrity.

This Insight dives into key takeaways from the panel discussion.

KEY TAKEAWAYS

• The CFTC is refocusing efforts to balance between commission oversight and delegated chair authority.
• The agency’s enforcement strategy is evolving toward fraud prevention, cooperation incentives, and harmonization with other regulators.
• Enhanced transparency and accountability frameworks are being implemented following internal reviews and judicial scrutiny.
• Through its digital asset initiatives and joint efforts with the SEC, the CFTC is advancing regulatory clarity while encouraging responsible innovation.

COMMISSION STRUCTURE BALANCING ACT

Recent developments have prompted a fundamental question: can a single commissioner act as the Commission? While the statutory text defines the Commission as a collective body, it also grants significant administrative and executive authority to the chair, including budget allocation, personnel supervision, and oversight of agency operations.

This structural balance reflects a broader theme in understanding how the CFTC maintains cohesive governance in a period of institutional transition. As the agency’s jurisdiction expands across derivatives, commodities, and digital assets, clarifying various lines of authority will remain critical to ensuring both institutional integrity and effective policymaking.

ENFORCEMENT AND POLICY RETRENCHMENT

The CFTC’s recent “enforcement sprint” resulted in settlements exceeding $8 million with several global financial institutions for recordkeeping and supervision failures. At the same time, the Division of Enforcement has reorganized to emphasize fraud prevention and investor protection, creating two specialized branches to address complex and retail fraud.

Alongside these developments, the CFTC has withdrawn or reconsidered a series of prior issuances, including operational resilience and carbon credit guidance, to eliminate duplication and promote consistency with other regulators. These moves highlight a strategic shift toward precision regulation: withdrawing outdated guidance, codifying no-action relief where appropriate, and focusing resources on enforcement actions that advance the agency’s core mission.

ENHANCING OVERSIGHT AND TRANSPARENCY

Following investigations by the CFTC’s Office of the Inspector General and a congressional inquiry, the agency is conducting an internal review of staff time-and-attendance compliance, telework policies, and office protocols. In addition, court sanctions over evidence that was withheld in an enforcement case prompted the CFTC to strengthen its transparency and cooperation framework.

The Division of Enforcement has since published detailed guidelines modeled on US Department of Justice principles, outlining how self-reporting, remediation, and cooperation will influence penalty recommendations. These measures reinforce the CFTC’s commitment to restoring public confidence while redirecting enforcement resources toward higher-impact cases involving fraud and market manipulation.

DRIVING INNOVATION AND GLOBAL ENGAGEMENT

The CFTC continues to position itself as a leader in digital asset regulation. Following the President’s Working Group on Financial Markets’ report on stablecoins, the agency is pursuing initiatives to enable digital asset trading at the federal level by providing clarity on registration, custody, trading, and recordkeeping requirements. It is also exploring tools such as safe harbors and regulatory sandboxes to accelerate responsible innovation.

In partnership with the US Securities and Exchange Commission, the CFTC has issued a joint statement on regulatory harmonization, focusing on aligning product definitions, data standards, and capital frameworks. A joint roundtable earlier in September 2025 advanced this coordination. Complementing these efforts, the Commission has issued a series of no-action letters extending relief for position aggregation and swap reporting, particularly for non-US entities. It has also opened comment periods on tokenized collateral, spot crypto asset contracts, and 24/7 trading, underscoring a commitment to stakeholder engagement and measured regulatory innovation.