CFTC’s Chicago ’Top Cop’ Enforcement Team Eliminated as Agency Shifts Into Crypto and Prediction Markets
The Commodity Futures Trading Commission’s flagship Chicago enforcement team — long viewed as the agency’s “top cop” for handling complex litigation — has been fully eliminated, according to reports. The office, which once employed about 20 enforcement attorneys, was reduced to zero after the final enforcement lawyer resigned. The cuts come amid a broader 21% agency staff reduction last year and follow CFTC leadership moves to expand the agency’s oversight into crypto and prediction markets. Monetary relief secured by the CFTC plunged from $17.1 billion in fiscal 2024 to just $9.2 million in 2025, a fall of over 99.9%. Former enforcement lawyers said the staffing cuts targeted the Chicago office’s expertise, which had helped win major settlements from crypto firms including FTX and Binance. Agency leadership changes include Caroline Pham, who led the agency as acting chair in 2025 and later joined crypto firm MoonPay, and Mike Selig, the CFTC chair nominee who declined to commit to new resources during his Senate hearing. Experts warn the agency may lack capacity to police insider trading and manipulation across thousands of prediction markets. The CFTC did not immediately comment.
Bearish
The elimination of the CFTC’s Chicago enforcement team and steep agency staff cuts reduce US regulatory enforcement capacity at a time when the agency is expanding into crypto and prediction markets. For traders, this is likely bearish in the near term for several reasons: 1) Reduced enforcement can lower perceived legal risk for bad actors, potentially increasing fraudulent activity or market manipulation that raises volatility and undermines trust. 2) The dramatic drop in monetary relief and loss of experienced litigators weaken regulators’ ability to pursue large recoveries and deter misconduct, which may prompt greater regulatory uncertainty and episodic shocks when enforcement actions do occur. 3) Nominee leadership unwilling to request more resources signals slower or uneven implementation of clear rules for crypto and prediction markets, increasing policy risk. Historically, episodes of weakened enforcement capacity (or perceived regulatory capture) have led to short-term rallies in risky assets followed by sharp corrections when misconduct surfaces (e.g., post-FTX developments). In the long term, markets could bifurcate: projects with strong compliance and transparency may gain relative trust, while lower-quality tokens face greater soundness concerns. Overall, expect increased volatility, higher tail risk, and a cautious trading environment until enforcement capacity and regulatory clarity are restored.