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The Revolving Door Project, a Prospect partner, scrutinizes the executive branch and presidential power. Follow them at therevolvingdoorproject.org.
Last Wednesday, the Blockchain Association, Washington’s largest cryptocurrency advocacy group, announced that it had hired a new CEO, CFTC Commissioner Summer Mersinger. Unlike most previous commissioners who revolved out of the Commodity Futures Trading Commission and into the arms of the private industries they were tasked with regulating, Mersinger’s future employer has been announced ahead of her departure. The Republican commissioner will not be leaving the CFTC until May 30, giving her two weeks of continued policy influence as a formally announced future employee of a pro-cryptocurrency group.
Mersinger has been a conservative crypto ally throughout her tenure at the CFTC, regularly voting to assist the industry. As Amanda Fischer, policy director and COO of pro–financial regulation group Better Markets, told the Prospect: “During her [Mersinger’s] tenure at the CFTC, the Commission failed to protect investors and police aberrant trading patterns in many crypto tokens, including and especially President Trump’s meme coin. For those few enforcement actions the CFTC did bring, Mersinger often dissented in defense of the crypto industry. And at the same time, she argued to make it easier to gamble on our elections and allow the proliferation of gambling more broadly by allowing firms to repackage their bets as ‘derivatives.’”
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The Blockchain Association’s hiring of Mersinger exemplifies how corporations exert power over the regulatory process. By hiring regulators friendly to their cause to lucrative post-government posts, industry is able to ensure the compliance of current and future regulators worried about their long-term financial prospects. Rather than explicitly agreeing to pay regulators friendly to their agenda after their employment (which is illegal), corporations seeking to influence the direction of federal policy operate on furthering a tacit understanding that lucrative employment awaits those willing to help their cause. Such jobs are worth much more over the long run than, say, a couple bars of gold.
Once she’s a former CFTC commissioner, Mersinger will be barred from “knowingly mak[ing], with the intent to influence, any communication to or appearance before the Commission” for one year, but that likely does not matter to the Blockchain Association. The point is to reward her for things she already did. And now that she’s gone, control of the CFTC may end up in the hands of a single Silicon Valley crypto booster.
The Trump administration has openly embraced cryptocurrency, pushing regulatory overhauls that are favorable to the industry, and even launching Trump-branded cryptocurrencies as the ideal means of self-enrichment. This has provided the Blockchain Association with an opportunity to finally pass the legislation it has been fighting for since its establishment: a cryptocurrency market structure bill that would strip the Securities and Exchange Commission (SEC) of its authority over digital assets, and bestow this power on the relatively weak CFTC. This was a goal being pushed effectively by Sam Bankman-Fried’s charm assault on the federal government until his crypto firm FTX imploded, thanks to billions in fraud, and Bankman-Fried went to prison.
Despite the scandal, the idea never became as politically toxic as one might assume given SBF’s notoriety. Instead, the industry lay relatively dormant, pushing other bills to the fore, all the while keeping the hopes of this deregulatory package alive.
The Blockchain Association’s hiring of Mersinger exemplifies how corporations exert power over the regulatory process.
Mersinger is being hired by the Blockchain Association to head this rekindled push for CFTC control over the crypto industry. Instead of lobbying the CFTC on behalf of the industry, she will be the face of the crypto charm offensive on Capitol Hill, where she previously worked as chief of staff to Senate Majority Leader John Thune. As a part of this effort, Mersinger will get to combine her decade-plus of legislative experience with the credibility she has earned as a former agency commissioner to assuage any doubts that the CFTC will be a capable regulator of the industry.
Mersinger is not the first CFTC commissioner to believe that the regulator is capable of handling cryptocurrency despite the industry’s abundance of fraud, money laundering, and reckless behavior. In fact, former Democratic CFTC Chair Rostin Behnam was among those seemingly eager for the agency to take the reins from the SEC, despite the CFTC’s staff being a fraction of the size, having statutorily weaker powers, and being more vulnerable to congressional meddling in the budget process. But with a Republican-controlled Congress, and congressional Democrats apparently willing to play ball with the industry despite its unprecedented spending on behalf of Republicans last cycle, Mersinger may be what it takes for the crypto industry to finally see its agenda cross the finish line.
But Mersinger’s departure is not only a threat due to the role she may play in passing dangerously ill-conceived crypto legislation. It could also leave the CFTC at the whims of a single Trump sycophant. The five-member Commission is currently one member short, and it will be down to three members once Mersinger leaves.
Democratic Commissioner Christy Goldsmith Romero had already announced her intention to retire after the confirmation of Trump appointee Brian Quintenz, but she accelerated the timeline on Friday, announcing her plans to retire at the end of May. This will leave just two commissioners at the agency by the beginning of June. In addition to Goldsmith Romero’s departure, current acting Chair Caroline D. Pham is reportedly searching for a suitably cushy gig outside of government to jump to.
While Quintenz’s confirmation hearing is yet to be scheduled, it would not be surprising to see the Senate Agriculture Committee rush through his confirmation to avoid having a two-commissioner CFTC made up of a Republican searching for the door and Democrat Kristin Johnson. Johnson had previously announced her intention to stay, only to reverse course on Wednesday, saying she will depart the agency “later this year.” If Johnson leaves before the confirmation of Quintenz, that would result in a one-party-controlled CFTC under Quintenz and Pham. Upon Pham’s departure, Quintenz would be the sole commissioner. Alternatively, if Pham leaves upon the confirmation of Quintenz, but before Johnson’s departure, the CFTC would have an even partisan split, something unacceptable to the Trump administration.
In this scenario, in all likelihood, we expect to see President Trump attempt to illegally fire Johnson to ensure Republican control. Given that the CFTC’s quorum requirement does not apply in the case of fewer than three sitting commissioners, this situation would give Quintenz unilateral power over one of the world’s most important financial regulators.
Quintenz, who until recently was working as the head of policy at a16z crypto—Marc Andreessen’s multibillion-dollar venture capital fund, which has invested heavily in crypto—would be able to rule on complex financial questions by himself. There would be no need to waste precious Senate floor time on further confirmations of Republican commissioners (though it presumably would be done eventually) as the handpicked champion of the cryptocurrency industry would have unquestioned control over the CFTC. This is not only a win for the longtime crypto push in D.C., but for the president as well, as his single loyalist would be unlikely to take any actions to rein in the president’s burgeoning meme coin corruption empire.
While Johnson said she is “confident that the Commission will continue to do important work protecting investors and customers, combating fraud and market manipulation, and ensuring market integrity and stability,” there is little reason to believe this. A Quintenz-run CFTC would be one beholden to vested interests, above all crypto. Consumer protection likely wouldn’t be given a second thought.
While Senate Democrats should fight to prevent this outcome, there are reasons to doubt that this worst-case scenario would result in a unified Democratic opposition. Marc Andreessen has been ingratiating himself with Ruben Gallego, the highest-ranking Democrat on the Senate Banking Subcommittee on Digital Assets. Other Senate Democrats joined Gallego in voting to advance the cryptocurrency’s dangerous GENIUS Act on Monday evening, splitting the caucus and reportedly leading to a heated exchange on the floor of the Senate between crypto-friendly Kirsten Gillibrand and Elizabeth Warren, the Senate Banking Committee’s crypto-skeptic ranking member. Gillibrand in particular has been among the strongest voices calling for the CFTC to be the main regulator of the cryptocurrency industry, going back to the days when SBF was dictating crypto policy in D.C.
Better Markets’ Fischer told the Prospect that “President Trump may well fire CFTC Commissioner Johnson when it is politically advantageous, but the law is not on his side. In fact, Democrats should insist on protecting Commissioners at the CFTC and other multi-member commissions instead of working with the crypto industry to loosen regulations.” Unfortunately, it seems as though Johnson might not wait around at the CFTC to fight this. If she leaves the agency, that would negate the possibility for a legal fight to protect a Democratic seat.
A one-commissioner CFTC is the perfect combination of authoritarianism, corruption, and recklessness befitting the Trump era. While the dismantling of the CFTC is being done on behalf of the cryptocurrency industry that emerged as one of the principal backers of the Republican Party in 2024, the agency is also a linchpin regulator in the global financial system more generally. The CFTC has already shown its willingness to rubber-stamp dangerous policies like 24/7 derivatives trading and allowing gambling companies to circumvent regulations by posing as derivatives.
Increased lack of oversight will not only fuel the dangerous growth of cryptocurrency, but it could also enable futures and derivatives markets to go unchecked like they did in the lead-up to the 2008 financial crisis. By hiring Mersinger, the Blockchain Association didn’t just purchase a (soon-to-be) former CFTC commissioner to lead their lobbying campaign; it may have bought the whole agency.
