CFTC Approved Trump-Tied Crypto Firms and Punished the Staff Who Objected

Five career officials at the Commodity Futures Trading Commission (CFTC, the federal derivatives regulator) were placed on administrative leave, subjected to internal investigation, or forced out of the agency after raising concerns about three crypto and prediction market firms with documented financial ties to President Donald Trump’s family. Each company secured the regulatory approvals it sought. None of the disciplined officials were told the specific reason for the action against them, according to a New York Times investigation published May 24, 2026, based on agency documents and more than 30 interviews with current and former employees.

Two weeks later, the Senate Banking Committee cleared legislation that would hand this same agency exclusive jurisdiction over the entire US cryptocurrency spot market, a regulatory domain several times larger than the derivatives business the CFTC has historically overseen.

The Three Companies and Their Trump Connections

Each of the three firms required CFTC clearance for its prediction market ambitions, and each carried a verifiable financial or advisory relationship with the Trump family that career staff said made impartial review difficult.

Polymarket settled with the CFTC in 2022, paying a $1.4 million penalty for operating an unregistered event-contract market and agreeing to restrictions that barred American users from the platform. The company has since been negotiating to lift those restrictions and re-enter the US market. Donald Trump Jr., whose venture firm 1789 Capital holds an investment in the company, serves as an unpaid adviser to Polymarket.

Crypto.com is a formal business partner of Trump Media & Technology Group, the company behind Truth Social, with which it announced plans to launch a prediction market product called “Truth Predict.” Staff raised concerns that the company was not treating small bettors fairly, and those staffers were subsequently removed from the relevant discussions, the investigation reported.

Gemini Titan, a derivatives affiliate of Gemini Space Station (NASDAQ: GEMI) co-founded by Cameron Winklevoss and Tyler Winklevoss, received the CFTC’s formal Designated Contract Market designation on December 10, 2025, after an application filed in March 2020. It received a Derivatives Clearing Organization (DCO) license on April 30, 2026. The Winklevoss twins are financial backers of American Bitcoin, listed on its website with Eric Trump as co-founder and chief strategy officer.

What Staff Found When They Looked

Career officials at the agency did not stay quiet when they examined the applications. Based on agency records cited in the investigation, they documented specific compliance deficiencies before any approval was granted:

• Polymarket: Lacked adequate fraud protections, staff concluded after reviewing the platform’s consumer safeguard systems.
• Crypto.com: Was not treating small bettors fairly, staff found when assessing the company’s proposed prediction market design.
• Gemini Titan: Had not completed the mandatory regulatory review process before beginning to operate, raising a threshold eligibility question that staff said should have paused the application.

One episode illustrated how far leadership was willing to go around those objections. Senior counsel Brigitte Weyls allegedly sent staff a draft memo recommending approval for the Gemini affiliate before the agency’s own internal reviews had even been completed, reversing the standard sequence in which career examiners finish their assessments before any recommendation is sent upward. Staff who pushed back on that reversal were later among those removed from the agency.

Those objections were formally documented. Multiple officials later told the investigation they believed the paper trail would protect them. In each of the three cases, the same people who put their concerns in writing were eventually sidelined or pushed out.

How the Approvals Got Done Anyway

Then-acting CFTC Chair Caroline D. Pham and Weyls, her senior counsel, intervened directly on behalf of all three companies, overriding career staff in each instance, the investigation found. Both declined to comment to the newspaper.

Tyler Winklevoss, chief executive of Gemini Space Station, celebrated the approval in terms that made the political relationship explicit. In the official December 10, 2025 DCM license announcement published on Gemini’s investor relations page, he said:

We thank President Trump for ending the Biden Administration’s War on Crypto and Acting Chairman Pham for her hard work and dedication to help realize President Trump’s vision for making America the crypto capital of the world.

That statement was released as career staff were formally raising concerns about whether the Gemini affiliate had completed the required review process before operating. The acting chair declined to comment on the investigation.

By Christmas 2025, two of the officials who had raised concerns were placed on administrative leave and denied access to the office. By spring of the same year, three senior enforcement officials, including the division’s chief counsel, deputy director, and chief trial attorney, were placed under internal investigation on grounds described vaguely as involving “the handling of certain enforcement matters.” In total, five career officials found themselves removed or under investigation. None was told the specific basis for the action taken against them, per people who spoke to the newspaper.

All three companies disputed the allegations. Each said in statements to the newspaper that it complies with applicable regulations and maintains strong safeguards. The White House rejected the findings. “President Trump only acts in the best interests of the American public,” spokesman Davis Ingle told the newspaper. “There are no conflicts of interest.”

Enforcement by the Numbers

The personnel moves came alongside a documented collapse in the agency’s crypto enforcement record during the same period, a parallel shift the investigation traced in detail.

• 2 digital asset enforcement actions announced under the second Trump administration, both against individual operators
• 80+ crypto enforcement actions filed during the Biden administration
• 24+ enforcement actions filed during Trump’s first term
• 5+ crypto investigations dropped or closed without resolution under the current administration

A separate matter illustrates the posture shift at the individual-case level. Peken Global, the operator of crypto exchange KuCoin, was ordered in March 2026 to pay a $500,000 civil monetary penalty for operating without proper registration, far below what the agency’s own lawyers had been seeking. Pham had pushed to drop the case outright, the report found; the $500,000 figure was the outcome of a compromise reached after the staff attorneys pressing for a larger penalty were taken off the matter.

The Revolving Door Closes Neatly

Once the approvals were complete, both officials departed for industry positions that tracked precisely with the firms they had helped. The former acting chair joined MoonPay, a crypto payments company with a direct partnership with the prediction market platform whose US market path she had cleared. Weyls became general counsel at the Gemini affiliate she had championed, the entity that received its Derivatives Clearing Organization license, confirmed in Gemini’s official April 2026 DCO license announcement, months after the personnel actions that had removed staff who questioned the firm’s review process.

An earlier episode showed how personally entangled the appointments around the agency had become. Brian Quintenz, Trump’s first nominee for the CFTC chairmanship, had his nomination withdrawn after Cameron Winklevoss and Tyler Winklevoss lobbied against him, the investigation reported. Quintenz had declined to commit to supporting the exchange founders’ complaint against the agency’s own enforcement attorneys, which reportedly cost him the position before he reached a Senate confirmation hearing.

Current CFTC Chairman Michael Selig, who holds the sole commissioner seat at an agency meant to be overseen by a bipartisan group of five, previously represented crypto companies as a partner at Willkie Farr & Gallagher before serving as chief counsel to the Securities and Exchange Commission (SEC) Crypto Task Force. The House Agriculture Committee wrote to Trump urging him to nominate a full complement, saying the CFTC would be “best served by a full five-member commission” delivering “better regulations, more durable rules, and more sensitivity to the divergent views of key derivatives market stakeholders.”

Days after the investigation published, Trump posted on Truth Social calling it “critically important” for the CFTC to maintain “exclusive authority” over prediction markets and naming four state officials he characterized as obstacles. Attorneys general and governors in New York, Minnesota, Illinois, and other states have moved to restrict or ban prediction market platforms within their borders, with the CFTC filing lawsuits and amicus briefs defending federal jurisdiction. The legal dispute over whether event-contract betting constitutes a federally regulated derivative or state-governed gambling has already reached the appellate level and may reach the Supreme Court.

The CLARITY Act’s Uncomfortable Timing

Against that backdrop, Congress is moving to significantly expand the agency’s mandate. The Digital Asset Market Clarity Act (CLARITY Act, the proposed federal framework for digital asset markets) cleared the Senate Banking Committee in a 15-9 bipartisan vote on May 14, 2026. The legislation as passed by the House would give the CFTC exclusive jurisdiction over the spot and cash markets for most major digital assets, including Bitcoin and Ether, turning an agency that has historically regulated only derivatives into the primary federal watchdog for the largest segment of US crypto trading. Galaxy Research, the investment research arm of Galaxy Digital, puts the probability of the bill becoming law in 2026 at 75%, with a projected signing in early August.

That expanded mandate has always carried a resource objection: the CFTC runs on a substantially leaner budget and workforce than the SEC, the agency whose crypto jurisdiction the CLARITY Act would largely absorb. Amanda Fischer of Better Markets, a financial reform advocacy organization, argued that the investigation’s findings should directly influence the legislative debate and the scope of authority Congress grants the agency. Sen. Richard Blumenthal, Democrat of Connecticut, called for scrutiny of how the CFTC makes its enforcement and approval decisions. A full Senate floor vote requires 60 votes, and an unresolved ethics provision, one that would restrict officials from personally profiting off the industries they regulate, has stalled floor scheduling; Democrats who voted yes in committee have said that language is the price of their continued support.

If the CLARITY Act clears the Senate with those ethics provisions intact, the conduct described in the investigation will arrive at every commissioner confirmation hearing that follows. If the provisions are stripped before a floor vote, Congress will have delivered the largest mandate in the agency’s history to a body that, by its own career staff’s documented account, spent the past year removing the people assigned to exercise independent enforcement judgment.

Disclaimer: This article is for informational purposes only and does not constitute investment, legal, or regulatory advice. The companies, agencies, and individuals named are subject to ongoing regulatory and legal processes. Figures are accurate as of publication. Readers with financial exposure to crypto markets or prediction market platforms should consult a qualified financial or legal professional before making decisions.