Commission Of 1: A Top Wall Street Regulator Gains New Sway Over Crypto, Prediction Markets Under Trump

A 36-year-old ally of cryptocurrency and prediction markets is amassing unprecedented power over them under President Donald Trump.

It’s not going over well with everyone in Washington.

Michael Selig, who leads a tiny Wall Street regulator, in less than six months on the job has begun ushering in a friendlier landscape for the hottest and riskiest frontiers of finance. But his ascendance is drawing alarms on Capitol Hill and even within his own agency, the Commodity Futures Trading Commission.

Selig is the sole member of what is supposed to be a five-person bipartisan commission — an unusual setup giving him unilateral say over everything from prediction markets like Kalshi and Polymarket and novel crypto products to oil futures. Lawmakers in both parties are calling for additional commissioners as they weigh handing the CFTC new authority over the $2 trillion crypto market as part of a watershed digital assets bill.

His rush to embrace upstart industries, meanwhile, has provoked the ire of a Wall Street titan — and perturbed Selig’s own staff, a half dozen current and former agency officials told POLITICO. Some inside the CFTC are questioning whether the roughly 550-person agency can handle its growing sway over the markets as a fresh round of buyout offers has further roiled a staff already on edge from earlier oustings and attacks on their work.

“When I was chair of the CFTC, I often said the agency was like ‘The Little Engine that Could’ in the children’s book — though small and underestimated, it consistently excelled and raised the bar,” said Timothy Massad, who led the agency during the Obama administration. “Now it seems more like a train wreck, with its credibility, independence and the morale of its staff decimated.”

CFTC spokesperson Brooke Nethercott, when asked for comment for this report, said Selig “is bringing markets onshore where they will be subject to the CFTC's robust regulatory regime.”

“Writing clear rules and imposing stringent regulation on otherwise highly leveraged offshore markets should be everyone's priority,” she said.

A current CFTC official, who, like others for this report, was granted anonymity over fears of retaliation, said the agency “just doesn’t have the operational or moral capacity” to oversee crypto.

Nethercott called that “a despicable description of our dedicated civil servants.” She added that the CFTC can handle its growing to-do list, noting that the agency expects to hire about 100 staff by the end of the year.

The mounting unrest poses a new threat to Selig’s fast-moving agenda, which he has at times moved to implement in a fashion more like a Silicon Valley founder than a Washington regulator.

Founded to oversee agricultural markets, the CFTC is a once-staid financial regulator that already wields tremendous influence over the trading of trillions of dollars every day. But the rise of buzzy prediction market platforms has set a spotlight on the agency over the last year. And the crypto bill, which backers hope to pass this summer, would officially crown Selig a top authority over the digital assets market and the hordes of firms involved in it — from Coinbase to the Trump-linked crypto venture World Liberty Financial.

Selig has won over new MAGA power players, C-suite executives and Trump himself with an aggressive agenda built around fostering the growth of innovative industries like crypto and the prediction markets — both of which faced existential fights during former President Joe Biden’s administration. That has included new rules, product approvals and a pullback on the enforcement efforts of his Biden-era predecessors. Late last month, Trump praised Selig in a post on Truth Social — saying he is “respected by all.”

But on Capitol Hill, his lone-wolf status is coming under scrutiny. Senate Agriculture Chair John Boozman of Arkansas and House Agriculture Chair GT Thompson of Pennsylvania, whose committees oversee the CFTC, have called on Trump to nominate Republican and Democratic commissioners to join Selig. And many Democrats are pushing for more commissioners as part of the negotiations over the crypto bill.

“We’ve got one guy who has clear leanings toward the industry,” said Sen. Elissa Slotkin of Michigan, a Democrat who sits on the Ag panel. “I’ve got a problem with that.”

The CFTC is able to legally operate in full with a one-person commission. But Selig has said he would welcome other commissioners. The White House plans to nominate “more America First patriots to the commission in the near future, which Chairman Selig has been supportive of,” White House spokesperson Davis Ingle said in a statement.

The CFTC chair, however, isn’t waiting around — something he made clear to a panel of House lawmakers earlier this year when he said the agency “cannot, for the sake of the American people, slow down on our rulemaking.”

Some Republicans praise the CFTC’s approach under Selig. Sen. Bill Hagerty of Tennessee, a GOP member of the Senate Banking Committee who has been involved in the crypto bill talks, said Selig and his team “are entirely capable of handling” the new authority.

Adding commissioners could help strengthen the agency’s rulemaking efforts — and potentially help insulate it from legal challenges, proponents of the move say. That’s because commissioners frequently negotiate over proposals and final rules, often resolving potential weak points in advance.

It also risks gumming up Selig’s ambitious plans, though.

The CFTC chair has moved quickly as a commission of one to draft new rules, green-light novel investment products and even challenge states like New York, Illinois and Arizona that are seeking to crack down on CFTC-registered prediction markets — a pro-innovation push that has earned him praise from executives.

“He’s doing God’s work,” said Chris Perkins, who leads the crypto investment firm 250 Digital Asset Management.

But Selig’s recent approval of a first-of-its-kind crypto product has prompted outrage from the exchange behemoth CME Group, whose stock was rocked after the decision. CME CEO Terry Duffy, whose company runs markets across the CFTC’s jurisdiction, said on CNBC last week, “this could be a disaster waiting to happen.”

The CFTC said it has been looking at the products — known as crypto perpetual futures, or perps — for months. Unlike traditional futures, perps, which have become a major attraction on overseas crypto exchanges, allow traders to indefinitely wager on the price of an underlying asset. “The Commission will not hinder lawful innovation,” Nethercott said in an earlier statement.

And yet, inside the CFTC, Selig's decision to back crypto billionaires Tyler and Cameron Winklevoss in their company’s attempt to vacate a Biden-era court settlement has distressed some staffers.

The CFTC has said the move was about walking away from a case, related to allegedly misleading statements about a crypto product, that never should have been filed. But the agency, in announcing the move, also took aim at former staffers involved in bringing the case and released troves of internal documents that otherwise would have never seen the light of day, rattling some officials.

“If people in the agency are nervous, good,” said Jack Baughman, an attorney who represented the Winklevoss-led company Gemini. “This sort of information should be made available in every case, in my view.”

The Winklevoss twins, who are major MAGA supporters, helped clear the way for Selig’s nomination as CFTC chair by voicing concern about Trump’s initial pick for the job.

A recent string of buyout and early retirement offers, meanwhile, has revived fears of another wave of departures from the CFTC. The agency was hit by a massive exodus of staff last year before Selig was confirmed.

The latest batch of offers was made within the CFTC’s Division of Market Oversight, or DMO, a critical unit that oversees derivatives exchanges and trading venues. A prediction market-focused rule proposal from the CFTC, released Wednesday, was also not led by DMO as it historically would have been — but rather, the general counsel’s office, according to a former CFTC official familiar with the matter.

Nethercott said the CFTC general counsel’s office has been “leveraging the technical expertise and deep institutional knowledge of DMO to draft comprehensive rules” and that to “imply anything in the CFTC is done in a vacuum is false.” When asked about the staff’s broader anxieties, Nethercott said Selig invites any staff member to speak with him directly.

Tensions between the CFTC’s political appointees and staff aren’t new, said Walt Lukken, who served as acting CFTC chair in former President George W. Bush’s administration and now leads the Futures Industry Association, a group representing companies across the derivatives markets. Lukken, who applauded Selig’s tenure to date, called him “the CEO of the agency” and said he has the right to make certain personnel decisions “to make sure qualified people are in the right spots at the right time.”

But for the staff, the shake-up is a worrying sign of what’s to come in the years ahead.

“It’s death by a thousand cuts,” the former official said.