Twenty-four hours after the New York Times published an investigation alleging that CFTC officials were fired for trying to regulate crypto firms with ties to the Trump family business, the President responded. Not with distance. Not with concern. With a full-throated endorsement.
On Monday, Trump praised prediction markets as “great for America” and publicly backed acting CFTC Chair Michael Selig, calling him “a fantastic leader who understands that innovation shouldn’t be strangled by bureaucrats.”
The statement landed like a bomb in Washington. The NYT investigation had documented how five senior career officials were suspended and pushed out after raising concerns about Polymarket, Crypto.com, and a Gemini affiliate. All three companies have documented business ties to the Trump family. The officials’ crime, according to the reporting, was doing their jobs.
Trump’s response didn’t address any of the specific allegations. Instead, he reframed the entire debate. The fired officials weren’t whistleblowers protecting consumers. They were “bureaucrats” blocking innovation. The companies they questioned weren’t potential bad actors. They were American businesses building “great products.”
It was a masterclass in political messaging. And for the crypto industry, it raised as many questions as it answered.
What Trump Actually Said
The President’s comments came through a combination of a Truth Social post and remarks to reporters at the White House.
On Truth Social, Trump wrote that prediction markets “let the American people put their money where their mouth is” and called them “more honest than the fake polls.” He praised Selig for “cutting through the red tape that was killing American crypto companies” and said the CFTC under previous leadership had been “weaponised against innovation.”
To reporters, he went further. He said the career officials who raised concerns were part of a “deep state regulatory machine” that had been trying to “destroy the crypto industry for years.” When asked directly about the NYT’s reporting that officials were fired for questioning firms with Trump family ties, he dismissed it as “more fake news from a failing newspaper.”
White House spokesman Davis Ingle reinforced the message, saying the President “acts in the public interest” and that streamlining crypto regulation benefits all Americans, not just specific companies.
The crypto industry’s reaction was split down the middle. Executives at the companies named in the NYT investigation stayed quiet. Crypto lobby groups praised the President’s support for innovation. Consumer advocacy organizations warned that gutting enforcement puts retail investors at risk. And former CFTC officials expressed alarm at what they described as the politicization of an independent regulatory agency.
The Revolving Door That Nobody Is Defending
Trump’s defense of Selig and the broader deregulation agenda didn’t address the most damaging details in the NYT investigation: the revolving door.
Former acting Chair Caroline Pham helped overrule career staff who raised concerns about Polymarket, Crypto.com, and Gemini Titan. She then left the CFTC and joined MoonPay, a company with a direct business partnership with Polymarket.
Senior counsel Brigitte Weyls reportedly sent staff a pre-written recommendation to approve Gemini Titan’s application before the career team had finished their own review. She then became general counsel at Gemini Titan itself.
These aren’t abstract policy disagreements. These are specific individuals who intervened on behalf of specific companies and then took paid positions at those same companies. The President’s “cutting red tape” framing doesn’t address why the people doing the cutting ended up on the payroll of the companies that benefited.
Selig himself previously represented crypto firms as a corporate lawyer before becoming the CFTC’s sole commissioner and acting chair. The agency that oversees crypto derivatives, perpetual futures, and prediction markets is now run by a single person whose career was built serving the industry he regulates.
None of this is illegal. Washington’s revolving door between regulators and industry is as old as regulation itself. But the speed, directness, and political context of these specific transitions make them harder to defend than the typical career change.
Prediction Markets Are the Flashpoint
Trump’s specific praise for prediction markets is significant because they sit at the center of the regulatory battle.
Polymarket, the world’s largest prediction market platform, settled with the CFTC in 2022 after regulators determined it was operating as an unregistered swap facility. The platform paid a $1.4 million penalty and agreed to restrictions that effectively barred US users. Now, it’s negotiating with the CFTC to lift those exact restrictions and reopen to American traders.
Career officials raised concerns that the fraud protections that prompted the original penalty hadn’t been adequately resolved. Those officials were suspended.
Kalshi, the CFTC-regulated prediction market that just raised $1 billion at a $22 billion valuation, faces legal challenges in multiple states. Arizona filed 20 criminal counts against the company. Nevada, New Jersey, and several other states have issued cease-and-desist orders. India blocked the platform entirely this week.
Trump’s endorsement of prediction markets as “great for America” sends an unmistakable signal to every regulator, prosecutor, and state attorney general considering action against these platforms: the White House is on their side.
For Polymarket and Kalshi, that backing is invaluable. For the state officials who view prediction markets as gambling operations that harm consumers, it’s a direct challenge to their enforcement authority.
The Enforcement Collapse in Numbers
The scale of the CFTC’s enforcement retreat under the current administration is worth understanding in concrete terms.
Under the previous administration, the CFTC brought over 80 crypto-related enforcement actions. These included cases against fraud, market manipulation, unregistered trading platforms, and consumer protection violations.
Under the current administration, that number has dropped to two. Both cases targeted individual operators rather than major platforms. At least five active investigations that were underway when the new administration took office have been dropped.
Current and former staffers described a clear internal message: don’t provoke the crypto and prediction market industries. The officials who didn’t get that message were the ones who ended up on administrative leave.
Trump frames this as deregulation. His critics frame it as regulatory capture, the phenomenon in which the agency tasked with overseeing an industry ends up controlled by the industry itself.
The reality is probably somewhere in between. Reducing enforcement from 80 cases to 2 isn’t deregulation. It’s disarmament. Whether that disarmament benefits consumers by removing unnecessary barriers or harms them by removing necessary protections will only become clear when the next major fraud surfaces, and in crypto, it always eventually does.
What This Means for the Crypto Industry
Trump’s public defense of Selig and prediction markets creates a political shield around the current CFTC approach that will be difficult for critics to penetrate.
Congressional Democrats can hold hearings and issue statements. Former officials can give interviews. The NYT can publish investigations. But as long as the President is publicly backing the acting Chair and the deregulation agenda, the practical reality on the ground doesn’t change. The CFTC will continue operating with minimal enforcement. Crypto firms with political connections will continue receiving favorable treatment. And career officials who raise concerns will continue to understand that doing so carries personal risk.
For the crypto industry, this creates an environment of maximum opportunity and maximum responsibility. When the regulator steps back, the onus falls on the industry itself to police bad actors, protect consumers, and maintain the integrity of its markets. Companies like Tether, which has frozen over $4.4 billion in illicit funds, and Chainlink, which is attracting protocols fleeing from less secure infrastructure, are demonstrating that self-regulation can work.
Whether the broader industry rises to that standard or takes advantage of the enforcement vacuum will determine how this chapter of crypto history is ultimately judged.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making any investment decisions.
