[Senate Hearing 119-214]
[From the U.S. Government Publishing Office]
S. Hrg. 119-214
NOMINATION OF MICHAEL SELIG TO BE CHAIR-
MAN AND COMMISSIONER OF THE COMMODITY
FUTURES TRADING COMMISSION
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HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
November 19, 2025
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on http://www.govinfo.gov/
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-997 PDF WASHINGTON : 2025
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
JOHN BOOZMAN, Arkansas, Chairman
MITCH McCONNELL, Kentucky AMY KLOBUCHAR, Minnesota
JOHN HOEVEN, North Dakota MICHAEL F. BENNET, Colorado
JONI ERNST, Iowa TINA SMITH, Minnesota
CINDY HYDE-SMITH, Mississippi RICHARD J. DURBIN, Illinois
ROGER MARSHALL, Kansas CORY BOOKER, New Jersey
TOMMY TUBERVILLE, Alabama BEN RAY LUJAN, New Mexico
JAMES C. JUSTICE, West Virginia RAPHAEL WARNOCK, Georgia
CHARLES GRASSLEY, Iowa PETER WELCH, Vermont
JOHN THUNE, South Dakota JOHN FETTERMAN, Pennsylvania
DEB FISCHER, Nebraska ADAM SCHIFF, California
JERRY MORAN, Kansas ELISSA SLOTKIN, Michigan
Fitzhugh Elder IV, Majority Staff Director
Corey Weber, Majority Chief Counsel
Jessica L. Williams, Chief Clerk
Lauren Santabar, Minority Staff Director
Chu-Yuan Hwang, Minority Chief Counsel
C O N T E N T S
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Wednesday, November 19, 2025
Page
Hearing:
Nomination of Michael Selig to be Chairman and Commissioner of
the Commodity Futures Trading Commission....................... 1
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STATEMENTS PRESENTED BY SENATORS
Boozman, Hon. John, U.S. Senator from the State of Arkansas...... 1
Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota.... 4
WITNESS
Selig, Michael, of Florida, to be Chairman and Commissioner of
the Commodity Futures Trading Commission....................... 5
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APPENDIX
Prepared Statements:
Selig, Michael............................................... 30
Document(s) Submitted for the Record:
Boozman, Hon. John:
Agricultural Industry Stakeholders in support of Michael
Selig, letter of support................................... 32
Crypto Council for Innovation in support of Michael Selig,
letter of support.......................................... 34
Selig, Michael:
Committee questionnaire, Office of Government Ethics
Executive Branch Personnel Public Financial Disclosure
Report and 5-day letter filed by Michael Selig............. 36
Question and Answer:
Selig, Michael:
Written response to questions from Hon. Amy Klobuchar........ 70
Written response to questions from Hon. Mitch McConnell...... 71
Written response to questions from Hon. Cindy Hyde-Smith..... 72
Written response to questions from Hon. Charles Grassley..... 73
Written response to questions from Hon. Raphael Warnock...... 73
Written response to questions from Hon. John Fetterman....... 75
Written response to questions from Hon. Elissa Slotkin....... 77
NOMINATION OF MICHAEL SELIG TO BE CHAIRMAN AND COMMISSIONER OF THE
COMMODITY FUTURES TRADING COMMISSION
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WEDNESDAY, NOVEMBER 19, 2025
U.S. Senate
Committee on Agriculture, Nutrition, and Forestry
Washington, DC.
The Committee met, pursuant to notice, at 3:04 p.m., in
Room G50, Dirksen Senate Office Building, Hon. John Boozman,
Chairman of the Committee, presiding.
Present: Senators Boozman [presiding], Hoeven, Hyde-Smith,
Tuberville, Grassley, Fischer, Klobuchar, Bennet, Smith,
Booker, Lujan, Warnock, Fetterman, Schiff, and Slotkin.
STATEMENT OF HON. BOOZMAN, U.S. SENATOR FROM THE STATE OF
ARKANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION,
AND FORESTRY
Chairman Boozman. It is my privilege to call the hearing to
order. I thank my colleagues for joining us today.
We will consider the nomination of Mr. Michael Selig to be
Chairman and Commissioner of the Commodity Futures Trading
Commission. Mr. Selig, congratulations on your nomination, and
thank you very much for your willingness to serve and your
family. These are always family affairs. Again, we appreciate
you very much.
As this Committee knows well, the CFTC is unique in that it
is the only federal financial regulator that oversees the
agriculture and energy risk management markets, the resiliency
of which are critical to our commodity supply chains. Well-
regulated liquid and resilient derivatives markets help our
producers manage risk ranging from interest rate uncertainty,
commodity pricing volatility, and natural disasters. In times
when uncontrollable risk can wipe away years of hard labor,
futures markets are an essential risk management tool in the
toolbox.
The CFTC has historically taken a pragmatic, principles-
based approach to regulation and is engaged in constructive
dialog with regulated entities and market participants. This
approach, combined with diligent policing of the cash and
derivatives commodity markets, has resulted in trust in the
CFTC and the deepest, most liquid derivatives market in the
world. The CFTC's regulatory regime is time-tested and has
helped the derivatives market serve as a gold standard in terms
of withstanding external shocks, and the CFTC staff have
developed deep expertise of the derivatives market.
The CFTC has seen the markets it regulates evolve over
time. Emerging markets such as crypto derivatives, and event
contracts have grown in size, and Congress, including this
Committee, is actively working on granting CFTC authority to
regulate the spot digital commodity markets. Turning attention
to the nuances that come with emerging markets while ensuring
focus on agricultural risk management markets is essential, and
it is my expectation that CFTC leadership will strike this
balance.
I want to repeat that I have said multiple times before
this Committee, the CFTC is the right agency to regulate spot
digital commodity trading. The CFTC and only the CFTC should
regulate the trading of digital commodities. This is because
only the CFTC understands the unique characteristics of
commodities and commodity-based contracts.
While the CFTC has the right regulatory approach,
expertise, and skillset to handle this new responsibility, it
is up to Congress to grant the agency this new authority to
regulate spot digital commodity trading. Failure by Congress to
do so will leave U.S. consumers vulnerable to bad actors and
will keep the U.S. behind the rest of the world. Though a
regulatory framework for spot digital commodities is yet to be
authorized by Congress, the markets and underlying technology
are fast at work. Absent a comprehensive U.S. regulatory
framework, bad actors will continue to go unchecked, and
legitimate entities will be disincentivized from participating
in U.S. markets. All the while, U.S. consumer participation
will continue to grow, as will the risk faced by consumers.
The Committee has an opportunity to advance its portion of
the regulatory framework that protects U.S. customers, also
allows U.S. businesses to grow, and recognizes the importance
of innovative blockchain technology and fundamental principles
like the right to self-custody. I want to thank Senator Booker
for his partnership on our bipartisan discussion draft, and I
look forward to working with him and the rest of the Committee
to advance a bipartisan proposal out of this Committee. The
time to act is now, and I look forward to working with each of
you toward advancing the goal.
As this Committee moves forward with its bipartisan
proposal to grant CFTC authority, I am eager to work with Mr.
Selig and CFTC on ensuring we get this right. It is so, so very
important. I look forward to hearing from Mr. Selig on these
issues. Again, congratulations on your nomination.
Senator Klobuchar is going to join us in a bit. You will
see that there is just all kinds of stuff going on right now,
and so we are going to have people coming and going, so she
will join us momentarily.
We will now proceed with our witness introduction.
Following the introduction, the Ranking Member will be around,
and we will recognize her at that time.
I now recognize Chairman Christopher Giancarlo, who will
introduce our nominee, Mr. Michael Selig.
Mr. Giancarlo. Thank you, Chairman Boozman, Members of the
Committee. It is an honor to be before you once again, if I may
say. I have had this honor several times in the past, both as a
nominee for Commissioner and as Chairman, and I am joined here
today by a number of other distinguished former Commissioners
and Chairs who have also had the honor of appearing before this
Committee.
As they know and I know, this Committee often meets in a
much smaller room, a room that really features what I think one
of the most distinctive features of any of the architecture of
the Senate buildings, and that is a simple table. This
Committee, as you know, meet around a table in the same way
that American families, American farmers, American producers
meet around their often kitchen table to discuss issues of
importance to them, and I think it is one of the hallmarks of
this Committee that you do the same.
I am here today to introduce Michael Selig. He served for
me when I was at the CFTC as a law clerk, and I got to know him
then back in 2015 as someone of just really remarkable clarity,
certainty, evenhandedness. He was a fine colleague right from
the beginning and someone who immediately dove into our work.
Over the next 10 years, he became an outstanding lawyer in the
area of the Commodities Exchange Act, so much so that in 2022,
when I had joined the law firm of Willkie Farr & Gallagher, I
invited Mike to join me there. He came on and quickly
established himself and became a partner in the firm, no easy
task in a large Manhattan law firm to do, and he did it with
the same effortlessness and the same clarity of vision that he
had when he served for me as a law clerk.
I was delighted earlier this year when he stepped down from
the firm, not that he stepped down, but that he went to the SEC
and joined the Crypto Task Force and now serves as an advisor
to Chairman Paul Atkins.
The Mike Selig that you will be hearing from today is
someone who I think you will find treats people with a fairness
and an evenhandedness that is very welcome in a government
official. He is someone that is hardworking, that is dedicated
to coming up with the right outcomes by first hearing every
point of view and getting to a balanced result. He is someone
who has a great deal of respect for American financial markets,
especially the markets overseen by the CFTC. He recognizes that
one of the underpinnings of our strong American economy is
these robust and strong markets, but also markets that are very
well regulated, and he has a great deal of respect for the role
of regulation.
Most importantly, he is somebody who is really determined
to serve the producers, the farmers, the ranchers, and the
everyday consumers that depend on these markets to serve their
needs, to hedge their risk in production. He is someone who is
going to follow the example of his predecessors and make sure
he gets around to the states that are represented here to make
sure that producers of those states know that these markets are
serving their needs, and in areas where perhaps they are not,
where he can address those needs when he comes back to
Washington.
Finally, I will just leave you with this. As someone who
sat in that seat as Chairman of the agency, I think I know what
it takes to be successful, to serve the needs of America's
important constituents, and I know that Mike Selig has all the
characteristics that will allow him to succeed in this
important role.
With that, I thank you for this opportunity philosophically
to be at your table, even though we are not in your hearing
room today, and I wish you a good hearing. Thank you very much.
Chairman Boozman. Well, thank you, Mr. Chairman.
Senator Klobuchar has joined us, and I appreciate her
flexibility in helping us get this arranged today, and these
are important positions.
Senator Klobuchar. Thank you.
Chairman Boozman. With that----
STATEMENT OF HON. KLOBUCHAR, U.S. SENATOR FROM THE STATE OF
MINNESOTA
Senator Klobuchar. Okay. Well, a nominee can wait through
my remarks here for a few minutes. I appreciate it.
Thank you, Mr. Chairman, for being here. Thank you,
Chairman Boozman.
I would also like to welcome your wife, Ariel. I know she
is here. Where? Right there. Very good. Your parents.
I want to welcome back, of course, the Chairman, who has
appeared many times before this Committee, as well as CFTC
Acting Chairman Pham and former CFTC Commissioners Walt Lukken
and Scott O'Malia, as well as Jill Sommers, so thank you for
being here.
The role of the Commodity Futures Trading Commission, as we
talked about yesterday, could not be more critical, as on-
again, off-again tariffs, rising input costs, and market
fluctuations have created a lot of chaos for farmers and
businesses. They need a well-functioning and reliable
derivatives market to help them manage their risk.
In addition to traditional commodities markets, the CFTC
has also seen significant growth in new markets, such as those
for event contracts, with trading volumes going from
essentially nonexistent to billions of dollars per month. This
Committee is currently contemplating a discussion draft of
legislation that would, for the first time, give the CFTC
regulatory authority over spot markets in digital assets, as
they also are dramatically increasing in trading volume.
In addition to these new technologies and new markets, the
CFTC is also confronting broader shifts in market structure,
including the growing influence of non-traditional
intermediaries, the rise of vertically integrated operations,
and moves to increased trading hours. These developments raise
important questions about the scope of the CFTC's oversight and
its ability to respond swiftly and effectively to risks in
complex and fast-moving markets.
To tackle these challenges head-on, I believe it is in the
public interest that the CFTC not only have a confirmed
Chairman, but also a fully functioning Commission. That would
include, of course, a Democratic appointee, in fact, two
Democratic appointees. The CFTC has operated much of the past
year without a full complement of bipartisan Commissioners and
has been operating for months with only an acting Chairman.
This uncertainty surrounding the leadership at the CFTC has
only created more chaos for people who rely on the CFTC.
Mr. Selig, as you and I discussed when we met, it is also
essential that the CFTC have the institutional capacity, both
in staffing and resources, to fulfill its mandate in the face
of what are existing challenges that have been there for a
while and also these emerging challenges and opportunities.
When the CFTC has lost about 20 percent of its staff--
obviously, you were not there--but when that has been
happening, it is critical that you ensure that the CFTC is able
to maintain the U.S. derivatives market position as the deepest
and most liquid in the world and that the CFTC can provide
robust protections for consumers, farmers, and businesses
across the country.
Thank you very much, Mr. Selig. Congratulations on your
nomination, and I look forward to the hearing.
Chairman Boozman. Thank you, Senator Klobuchar. With that,
let's administer the oath. Please stand and raise your right
hand.
Do you swear or affirm that the statement you are about to
provide is the truth, the whole truth, and nothing but the
truth, so help you God?
Mr. Selig. I do.
Chairman Boozman. Do you agree that, if confirmed, you will
respond to requests to appear and testify before any duly
constituted Committee of the Senate?
Mr. Selig. I do.
Chairman Boozman. Very good. With that, you are recognized
for your statement.
STATEMENT OF MICHAEL SELIG, OF FLORIDA, TO BE CHAIRMAN AND
COMMISSIONER OF THE COMMODITY FUTURES TRADING COMMISSION
Mr. Selig. Chairman Boozman, Ranking Member Klobuchar, and
distinguished Members of the Committee, thank you for the
opportunity to appear before you today as President Trump's
nominee for Chairman of the Commodity Futures Trading
Commission. I am grateful to the President for placing his
trust and confidence in me to lead the CFTC during this
historic time. Of course, I want to thank the Members of the
Committee for taking the time to meet with me ahead of this
hearing. If confirmed, I look forward to working with all of
you to pursue the CFTC's important mission in promoting the
integrity, resilience, and vibrancy of America's commodity
derivatives markets.
It is an honor to have former Commissioners and Chairmen in
the room today. Thank you for your guidance, wisdom, and
mentorship. I am grateful to my best friend and wife, Ariel,
who is here today, for her unwavering support.
I would like to thank my parents, Robert and Sandy, for
joining me here. My parents impressed upon me the importance of
hard work, and they instilled in me a deep love for the United
States and its values. They inspired me with stories of my
family's earlier generations, who migrated here in the 1800s,
fought for the Union in the Civil War, served in both World
Wars and the Korean War, and pursued the American Dream. My
father was a district attorney and president of his local
school board. He ingrained in me the immense value of public
service.
Early in my career, I served as a law clerk for CFTC
Commissioner Chris Giancarlo, who just spoke. He emphasized to
me the importance of derivatives markets to all Americans. Our
Nation's farmers, ranchers, energy producers, and commercial
businesses rely on futures and swaps for price discovery and
risk management. Robust markets for derivatives that enable
hedgers to lock in prices help ensure that the cost of
groceries, transportation, electronics, and all kinds of goods
and services do not fluctuate wildly for American consumers
each day. If confirmed, I would welcome the vital
responsibility to oversee the stability and security of these
markets and protect consumers from fraud and manipulation.
During my years in private practice, I advised a wide range
of market participants, subject to regulation by the CFTC. From
commercial end users, such as agriculture, livestock, and
energy businesses, to financial institutions like futures
commission merchants, swap dealers, and exchanges, to new
entrants, including digital asset firms. I have seen firsthand
how regulators, unaware of the real-world impact of their
actions and zeal for regulation by enforcement, can drive
businesses offshore and smother entrepreneurs in red tape. I
recall helping an agricultural firm that was forced to divert
significant time and resources from its business to defend
itself in an extensive investigation for harmless errors in its
swap data reporting.
Every day Americans pay the price for these regulatory
failures. If confirmed, I am committed to instituting
commonsense, principles-based regulations that facilitate well-
functioning markets and keep pace with the rapid speed of
innovation.
I have long believed in the mission of public service. This
year, I was honored to serve as Chief Counsel of the Securities
and Exchange Commission's Crypto Task Force and Senior Advisor
to Chairman Paul Atkins. In this role, I have worked diligently
to modernize the SEC's regulations to reflect new and evolving
technologies. I have participated in the President's Working
Group on Digital Asset Markets and advised on a broad swath of
derivatives policy matters, including coordination with the
CFTC.
Now, we are at a unique moment in the history of our
financial markets. A wide range of new technologies, products,
and platforms are emerging. Vertical integration is becoming
more prevalent, and we are seeing unprecedented retail
participation in the commodity markets. The digital asset
economy alone has grown from a mere curiosity to a nearly $4
trillion market. It is the American spirit to conquer new
frontiers. All Americans stand to benefit from a government
that embraces technology, productivity, and entrepreneurship.
Together, we can seize this generational opportunity to
modernize and future-proof our approach to financial regulation
and ensure that the great innovations of tomorrow are made in
America.
If confirmed, I commit to you that the CFTC will have a
steady hand at the wheel. If confirmed, I pledge to work
tirelessly with this Committee to facilitate well-functioning
markets, promote competition and innovation, and ensure that
the CFTC remains a world-class regulator in this golden age of
American financial markets.
Thank you for your time today, and I look forward to your
questions.
[The prepared statement of Mr. Selig can be found on pages
30-31 in the appendix.]
Chairman Boozman. Thank you, Mr. Selig.
Before I ask my questions, I would like to put letters of
support from agriculture and other stakeholders for Mr. Selig's
nomination into the record. Without objection, so ordered.
[The letters can be found on pages 32-35 in the appendix.]
Chairman Boozman. Mr. Selig, as this Committee deliberates
on granting the CFTC spot digital commodity regulatory
authority, what key considerations should we weigh, and why do
you feel the CFTC is the right regulator for spot digital
commodity trading?
Mr. Selig. Thank you, Senator, and thank you for the time
that we spent in your office discussing these matters. I think
it is a critical opportunity for this Committee and for our
country to move forward with digital asset market structure
legislation. It has been a priority of the President and, of
course, is something that is great for this country.
You know, we have so many entrepreneurs and builders and
developers that have been pushed offshore, and this has been
due to the lack of clarity. We need clear, simple guidelines.
We need consumer protection, and we need to stop with the
regulation by enforcement. I think this is a real opportunity
to develop a framework that can allow for software developers
to thrive, for new exchanges to crop up that are going to
protect investors and have the types of controls that you would
expect in an exchange, and make sure that we have the right
disclosure and requirements that we have typically in our
financial markets. I am excited about the opportunity to work
with your Committee on that.
Chairman Boozman. Very good. As the Committee deliberates
granting the CFTC spot digital regulatory authority, how should
we think about DeFi in ensuring that activities with respect to
technology are not subject to inappropriate intermediary
registration regimes?
Mr. Selig. Thank you, Senator. As I mentioned, I think
there is this issue of regulation by enforcement, and sometimes
we take a one-size-fits-all approach to all types of financial
products and services, but really, blockchain enables such a
broad swath of new types of products, services, applications,
and so it may not make sense in many cases to apply financial
regulation, for example, to a video game app that runs on a
blockchain.
I think when we are thinking about DeFi, it is something of
a buzzword, but really we should be looking to on-chain markets
and on-chain applications and thinking about the features of
these applications, as well as where there is an actual
intermediary involved, where we have some operator or
administrator. In many cases that may not be, and so we have to
think about the best approach, and I look forward to working
with your office to figure that out.
Chairman Boozman. The next question that I am going to ask
is really important and certainly very, very important to this
Committee. Can you describe your experience working with
agricultural stakeholders and how, if confirmed, you will
balance emerging market issues with maintaining focus on
agriculture risk management markets?
Mr. Selig. Senator, I am very glad to have the support of
about 20 of the large trade groups in the agricultural space,
and agriculture is a very important constituency within this,
you know, of course, the Agriculture Committee, as well as the
CFTC. America's farmers and ranchers really are the backbone of
this country, and they keep Americans fed and nourished every
day, so it is very important that they have proper risk
management tools available to them that are regulated by market
regulators like the CFTC.
My commitment to the agricultural world is that I will
always be an open door to hear your issues. I am committed to
being the sponsor and overseeing the Agricultural Advisory
Committee. As Chris Giancarlo mentioned in his introduction, I
plan to take a tour across the country and meet with the ag
community in each of your states, as well as many other states.
I think it is really important to be on the ground and really
see where everything is done and understand the businesses. As
being in private practice for many years, I really find it so
valuable to understand everyone's business.
I also plan to have a dedicated advisor in my office that
will be an agriculture advisor that will advise me on these
issues day to day, and, of course, I hope to restore the
Agriculture Convention that has been historically in Kansas
City and plan to bring it back.
Chairman Boozman. Very good. Can you describe the
importance of principle-based regulation and how it fosters
innovation?
Mr. Selig. Senator, yes. Principles-based regulation came
out of the Commodity Futures Modernization Act, and it has
really been a great innovation in regulation. It has allowed
for exchanges and market participants to have a lot of
flexibility in how they comply with certain core principles
that are really important to ensure that our markets have
integrity, that they are resilient, that they are vibrant, that
we protect investors from fraud and manipulation. The general
guidelines, for example, protecting against fraud and
manipulation, are there, but the exchanges and market
participants are able to figure out the best way to comply, and
that allows for innovation in the business sector. It allows
for innovation, with the regulators figuring out the best way
to help them get to a compliant state.
Chairman Boozman. Thank you. Senator Klobuchar.
Senator Klobuchar. Thank you very much, Mr. Chairman.
I will start with what is on the minds of a lot of our
agriculture producers, farmers, because, as I discussed in my
opening, the CFTC is dealing with markets and financial
instruments that are getting increasingly complex. The core
mission is to ensure that the markets farmers and ranchers use
to manage their risk are safe, reliable, and function as
intended.
Mr. Selig, how do you envision the CFTC continuing to
preserve these markets as a practical and accessible risk
management tool for farmers and other end users?
Mr. Selig. Thank you, Ranking Member. I really enjoyed the
time in your office getting to discuss many of these issues.
They are really important to everyday Americans. As we
discussed, overregulation can really trickle down to the
everyday consumer. Many of us are getting ready to head home
for the holidays, and, you know, the price of airfare can
fluctuate based on jet fuel, but luckily, we are able to lock
in those prices as businesses and hedge that risk. It is also
something that affects the grocery store every day, so it is
really important that we have these risk management tools.
I think it is vitally important that we consider how
overregulation of the real world, of energy, of agriculture, of
livestock, of technology, as we are discussing today, as well,
that has an everyday impact on consumers. My intention is to
modernize the rule set to make sure we are figuring out what
works, what does not work, and cutting back on what does not
work, fixing things that are broken, but not changing things
that are not broken where it is not necessary.
I do think it is vitally important that we modernize and
that we get rid of the lore, the staff lore, the no-action
letters, all of this kind of unwritten rules of the road, where
it is really hard for everyday Americans to comply. If we put
things in writing, we figure out what works, put it through the
notice and comment process or do it through a staff process,
but make sure that what we are putting out there is something
that people can follow, that they understand, and it is able to
be complied with and not something you need to hire a high-
priced law firm to figure out.
Senator Klobuchar. Do you think you can do that with your
existing resources when you add the potential crypto portfolio
on some of the new things that are coming your way for
regulation?
Mr. Selig. Senator, I am looking forward to getting into
the seat, and if confirmed, I am really--I am going to take a
hard look at the resource needs of the agency and hope to do
that assessment and then get back to your office and work to
make sure we have the resources to fulfill our critical
mission.
Senator Klobuchar. Okay. What specific regulatory tools or
approaches would you use to ensure that innovation in crypto
markets does not come at the expense of basic safeguards to
protect the public?
Mr. Selig. It is vitally important that we have a cop on
the beat. It is critical that we cannot have another big loss
of customer funds, as we have seen with MF Global, Peregrine,
and most recently FTX. The CFTC has always been a regulator
that is focused on protecting customer funds, making sure that
we have appropriate disclosure where required to do so, and
protecting consumers because, at the end of the day, these are
critical markets, and they affect, as I mentioned, the price of
the groceries, as well as, of course, now as we are embarking
into new digital domains, they could affect things like GPU
costs and digital asset costs.
I feel that we have massively overregulated the real-world
economy, as I mentioned. This affects agriculture, energy,
crypto, and so much more. If we can figure out what works, what
does not work, that is going to be the key to unlocking really
great markets for every individual and making sure that we do
not constrain our businesses and push them offshore.
Senator Klobuchar. You represented numerous derivatives and
crypto clients--we talked about this--while in private
practice. Tell me, how are you going to deal with conflicts of
interest, especially when you will be the only person, if
confirmed, on the Commission?
Mr. Selig. Senator, of course, I think that is a critical
issue. Having come from a law firm where I have been practicing
law for many years, I will always hold myself to the highest
ethical standards. I have, of course, been through a process
with the Nonpartisan Office of Government Ethics, as well as
the ethics staff at the CFTC. I have an ethics agreement that I
have signed and plan to adhere to all the terms of that. You
know, as a lawyer, you know, I am very much one that follows
the guidelines of the contract.
Senator Klobuchar. Following up on that, because I think it
is going to be very critical for trust and the like, so there
are no Democratic members of the CFTC right now. I know you
cannot appoint them yourself. You have talked about the value
of minority Commissioners in particularly the leadership they
can offer in working together. What is your view on the
importance of preserving the voices of minority Commissioners?
Will you advocate for the nomination and appointment of a full
board, including two Democratic Commissioners at the CFTC?
Mr. Selig. Senator, I do believe that it is very valuable
to have a diversity of viewpoints. I have always benefited from
that. My parents, sitting behind me, encouraged me to join the
high school debate team years ago, and I was always flipping
back and forth between different issues, and it really does
pressure test your thinking on things and really force you to
get to the right side. Oftentimes, you find out you are wrong.
I do think that is very important, and hope to have a diversity
of views throughout the building.
Of course, you know, the President is the one that makes
these decisions around nominations, but I will work with
whoever the President chooses to appoint.
Senator Klobuchar. In addition to the crypto--thank you--
the crypto coming your way, the volatility that we have seen in
the ag markets and the like, there has also been growing
interest in expanding derivatives market trading hours,
potentially even to 24-7 trading. If the Commission begins to
allow extended trading hours, what guardrails do you believe we
need to protect investors and prevent price dislocations,
especially in lower volume markets like agriculture futures?
Mr. Selig. As I mentioned in my opening statement, there
really is this confluence of new technologies and changes in
our markets that we need to be vigilant about. I hope to work
with all constituents on these issues and figure out what is
appropriate for each market. It is not necessarily one size
fits all, and so, you know, what works for, for example, crypto
may not work for pork bellies. We really need to look at this
on a product-by-product, market-by-market basis, and I look
forward to those discussions both at the Commission, as well as
with this Committee, if confirmed.
Senator Klobuchar. Okay. Thank you. I just continue to
believe if you are given a mandate with--I am out of time
here--with rulemaking and the like, that you most likely are
going to need more resources. I just do not know how you keep
doing what you are doing now, 20 percent down on staff right
now, and then a new mandate that this will all work. No matter
how, you know, good your background is or other Commissioners
that might come before us or when we get the full slate, I
think that is going to continue to be an issue, and I hope that
the White House will respect that.
Thank you very much, Mr. Selig.
Chairman Boozman. I actually very much agree with that.
Senator Hyde-Smith.
Senator Hyde-Smith. Thank you, Mr. Chairman.
I sure enjoyed our meeting earlier. I appreciate your
willingness to serve, as I said before, and all the issues that
we talked about is very important to Mississippi, so I am sure
we will have a lot to work on together.
As products and market participants emerge, the agency must
adapt to rising demands and increasing pressure on its limited
resources. The Commission deserves recognition for how
effectively it has managed these emerging duties so far.
However, the Congress now weighing market structure legislation
that may expand the CFTC's jurisdiction, the challenges ahead
are likely to become even more significant.
My question is, how do you plan to ensure the CFTC remains
focused on its core mission of protecting hedgers and
supporting transparent, well-functioning futures markets,
especially for our farmers and ranchers, while also
establishing a new regulatory framework and taking an increased
responsibility for a rapidly evolving digital asset market?
What makes the CFTC well suited to take on this responsibility?
Mr. Selig. Thank you, Senator. I, too, very much enjoyed
our conversation this morning. You know, if the CFTC is not
doing its job at making sure that our markets are working for
our agricultural firms, our farmers, our ranchers, our digital
economy now as well, it is simply not working. We need to make
sure that these are well-functioning markets. It is my
responsibility, if confirmed as Chairman, to get that job done.
I believe that we need to be vigilant in our surveillance
efforts, in our examination efforts of market participants, and
make sure that we are policing fraud and manipulation in these
markets. It is the CFTC's critical responsibility for
overseeing that these markets are well-functioning and
efficient, and I take that very seriously and intend to do that
job.
As I mentioned in my opening statement, I think some of the
just massive overregulation of participants, and as we
discussed this morning, particularly the FCM community, where
many of America's farmers and ranchers are reliant on these
entities to access the derivatives markets. If it is too
expensive for overregulating them and they do not have access,
they are not going to be able to hedge their risks, and that is
very concerning. That can result in a lot of volatility in the
markets, and that can affect everyday consumers. I am committed
to making sure that these markets are well functioning and that
appropriate risk management tools are available to our Nation's
farmers, ranchers, and everybody else.
Senator Hyde-Smith. Thank you, Mr. Chairman. I have no
further questions.
Chairman Boozman. Senator Smith.
Senator Smith. Thank you, Mr. Chair.
Welcome to the Committee, Mr. Selig. Welcome to your family
as well.
I want to just start by associating myself with the
questions that Senator Hyde-Smith and Senator Klobuchar asked
about the big potential change in the mission of the CFTC with
regard to digital commodities and what that would mean for the
CFTC if it were to take on that additional challenge. You have
described at a high level, but could I just press you a bit
more on this? What do you think it would take? What would be
the first two or three things that you would do? How would you
approach this with a little bit more detail as the CFTC takes
on this, you know, significant new focus potentially, depending
on what happens in Congress?
Mr. Selig. Thank you for that question, Senator. I think it
is vitally important, as I mentioned, that we have certainty,
clarity, and consumer protection in these markets. They are
being used by everyday Americans, and having real guardrails
around what these markets look like is critical. I really do
applaud the efforts of this Committee, as well as others within
the Congress, for putting together comprehensive, bipartisan
market structure legislation, and I think that is the first
step.
Once we get market structure legislation in place, I think
it is vitally important that we implement with haste because
these markets are going to keep developing, and we have to keep
in pace with the rapid speed of innovation.
There are a lot of things that we can do with our existing
authority, and I would very much take on the mission of making
sure that our investors are protected in these markets. The
CFTC has authority to police fraud and manipulation in the
crypto spot markets. It has authority to regulate the futures
markets, and also when there is leverage and financing involved
in these transactions.
Senator Smith. I am going to move on to my next question,
but I think actually what I am asking is more of a management
question. I understand that you can describe sort of what the
organization is supposed to be doing, but the question of how
you manage this kind of a transition is, I think, what I am
trying to get at, and perhaps other Members of the Committee
are trying to get at.
I would like to move to another question. In 2018, the
Supreme Court gave states the power to decide whether to
legalize sports betting or not. In my home State of Minnesota,
we have not done that. We have not legalized sports betting. Of
course, Minnesotans can bet on sports online anytime they want
to through the so-called prediction market platforms.
As I am sure you also know, through the Indian Gaming
Regulatory Act, tribes have the authority to regulate gaming
within their reservations, including sports betting.
This is my question. It seems to me that there is a bit of
a conflict here because we have got these prediction market
platforms which are offering sports wagers on tribal land with
no tribal oversight. Now sports betting firms will argue that
state and tribal laws do not apply because they are offering
these event contracts, but it seems to me that this could be a
semantics difference without an actual practical difference.
Certainly, people in Minnesota do not know whether they are
doing a sports wager or an event contract wager.
Here is my question. Putting aside this distinction between
a sports event contract and a sports wager, current CFTC
regulations clearly prohibit event contracts related to gaming
from being offered. If confirmed, can you commit to enforcing
that prohibition? Tell us a bit about how you see this issue.
Mr. Selig. Thank you, Senator. As someone who spent many
years practicing law at law firms, as well as studying the law
in law school, these are complex issues as to interpretation of
what it means to constitute gaming. Of course, I have the
utmost respect for our judges that are working on these issues
in the court system, and I intend to always adhere to the law
and follow what judicial decisions tell me to follow.
I also believe that these types of issues are ones that we
can work through together. Some of them are congressional
issues as to whether we change statutes in certain areas. Of
course, I was not at the CFTC at the time that this portion of
the Dodd-Frank Act was drafted. I was not working in this
Committee or on the Hill at the time, and so these are just
very challenging interpretive questions that I will look to the
courts on.
Senator Smith. Well, it seems to me that the CFTC's
prohibition on gaming is pretty unambiguous, and also Congress
has made this clear that when it gave the CFTC authority to
prohibit certain gaming contracts, that it intended to prevent
gambling through these futures contracts. It seems to me that
this is a semantics difference, and we should be able to count
on the CFTC to enforce the law.
Thank you very much, Mr. Chair.
Chairman Boozman. Thank you.
Senator Tuberville.
Senator Tuberville. Thank you, Mr. Chairman.
Mr. Selig, congratulations on your nomination.
A common complaint that I hear from participants in the
markets is that CFTC has been failing to do the basic blocking
and tackling of its core responsibilities. Obtaining a license
from the CFTC has become significantly more costly and time-
consuming. How do you plan to restore the CFTC's reputation
along these lines?
Mr. Selig. Thank you, Senator. I really enjoyed our time in
your office yesterday, talking through these and other issues.
You raise a very important issue at the CFTC. You know,
spending many years in private practice working with clients
that want their applications processed, that want to get
answers on their very important questions, it is vitally
important that the CFTC gives the attention that these market
participants deserve to the market participants.
As I mentioned in my opening statement, the staff
regulation by enforcement and the rule by unwritten law through
interpretive guidance that is not provided in any sort of
written form, what we call lore in many respects and through
no-action letters really is unacceptable, and so we need the
staff to work together with our applicants, with our
registrants, to get their businesses going.
If confirmed, my job is to get the agency running like a
business to really make sure that applications come in, they
are processed efficiently and quickly, so people can go on with
their business, and that is going to be a key priority of mine.
I also intend to evaluate the processes in place currently
within the Commission to ensure that they are efficient. If
there are steps that are unnecessary, we will take them out. If
there are things we need to be doing, we will add them into the
process. I want to make sure that people are not waiting six
months for a phone call from the staff.
Senator Tuberville. Thank you. Will you commit to working
to resolve outstanding issues restricting cross-border trade
flows in over-the-counter markets?
Mr. Selig. Senator, thank you. That is another important
issue before the Commission. I think it is critical that we
have substituted compliance in place where it makes sense. We
need to deregulate with our allies, make sure that they are
also allowing for our market participants to enter their
markets. We should do the same. I do think it is vitally
important to remove these blockages to over-the-counter
derivatives markets.
Senator Tuberville. Yes, how would you balance enforcement
actions with providing clear, forward-looking guidance to
innovators seeking to comply?
Mr. Selig. Senator, I think, as I mentioned earlier, we
have just massively overregulated the real-world economy. We
have pushed a lot of our innovators offshore with regulation by
enforcement, smothered them in red tape, really not allowed
them to go do the things they do best, be creative and build
great businesses. I would remove a lot of these barriers that
really are in their way from success.
I think the most important thing, as I mentioned, is to
remove a lot of these unwritten rules of the road, really
create clear and simple guidelines that you do not need a high-
priced law firm to figure out. I would create--make sure that
our forms are really efficient and able to be, you know, easily
understood and work with, of course, stakeholders to figure out
the best path forward. I would love to work with this Committee
on these issues as well.
Senator Tuberville. I would like to hear your thoughts on
something I hear a lot from our Bitcoin miners. Bitcoin, as
crypto, is a commodity. If we sell corn, if we sell cotton, we
pay taxes on it when we sell that commodity. When a Bitcoin is
mined from a miner, IRS is standing next door ready to get
their money from this Bitcoin. What are your thoughts on that?
Mr. Selig. Well, Senator, I think that blockchain enables
all new modes of commerce and really great economic mechanism
design where people can participate in these networks like the
Bitcoin network, earn rewards, and really earn a living by
contributing to these networks. I think they are vitally
important infrastructure. We should have them built in the
United States. We should make sure that we are protecting our
miners and infrastructure in the United States.
In terms of some of these areas that are really beyond the
scope of the CFTC's remit around tax and other things, I think
it is vitally important that we work together with the Treasury
and with our other agencies within the Administration to make
sure that we are providing the right incentives to these market
participants.
Senator Tuberville. Yes, it just seems a little unfair to
me that if you are a miner, you have got to pay taxes on it
immediately and not wait till you sell it. You know, we hear
that complaint all the time. I hope it is something we look
into and encourage more mining. Thank you very much.
Chairman Boozman. Senator Lujan.
Senator Lujan. Thank you, Mr. Chairman.
Mr. Selig, thank you for being here today. Thanks for
taking time to come by and visit in the office as well, sir.
As we are working to provide the CFTC with new authorities
over digital asset spot markets with tokens like Bitcoin
trading over $50 billion per day, the new authority would be an
enormous new duty. The CFTC is a small agency compared to the
SEC. Mr. Selig, yes or no, do you believe the CFTC would need
more funding and staff to properly oversee digital asset spot
markets?
Mr. Selig. Senator, thank you for that question. I really
enjoyed taking the time to meet with you yesterday and having
the opportunity to talk through crypto and lots of other
issues.
I think that once I am in the seat, I will be able to take
a much better look, if confirmed, of course, at the resource
needs of the agency, and so I am very eager to get into the
seat and be able to make that determination.
Senator Lujan. Would it surprise you that there is maybe
one or two people over there that have any expertise in this
space?
Mr. Selig. Senator, I believe that there are really great
career staff at the agency, and I am very much looking forward
to working with them. I believe that many of the agency staff
are very well equipped, really understand our commodity
markets, some of the best staff in the government, and so I am
really excited to work with them.
Senator Lujan. All right. I do not know why it is hard to
say we need more staff, but we need strong staff, and we need
the investment. This is a whole new space that we are building
in the United States of America. I think you would find
bipartisan support, everyone here working on the market
structure bill and all the rest. I think people want to hear
that we want to make an investment as the United States of
America in this space. I am just real surprised that it is so
hard to get that. I am guessing President Trump wants to see a
robust CFTC in this space?
Mr. Selig. Senator, I cannot speak for the President, but
my view here is that the CFTC has a critical mission to protect
these markets, to safeguard investors, and I will see that that
is carried out. Whether we need more resources or not, once
confirmed, I will make that assessment, but I really think it
would be irresponsible for me to prejudge that issue.
Senator Lujan. Have you looked at the current composition
of the staff at the CFTC?
Mr. Selig. Senator, I am familiar with the composition of
the staff, but I will have to be in the seat really to
understand what roles everyone is performing, what roles are
performed by technology. Of course, we can do more with less
with the great innovations of technology today, and so I
really, once confirmed, look forward to making those
assessments.
Senator Lujan. When confirmed and you identify the need at
the agency, will you come back to Congress and ask for the
resources if needed?
Mr. Selig. Senator, of course, I will absolutely make that
assessment, and if needed, I will be very happy to have those
discussions.
Senator Lujan. I will take that as a yes. I appreciate
that. Now, one of the areas I am concerned about, we spoke
about this, was the FTX debacle. The relationship between
Alameda Research FTX presented many conflicts of interest and
ultimately led to massive fraud. What are your views on the
deeply integrated structures of major digital asset companies?
Should exchanges be allowed to be vertically integrated?
Mr. Selig. Thank you, Senator. One of the great things that
kind of came out of FTX, as much as it was a massive disaster,
is that the CFTC's regulated DCM, the previously LedgerX and
became FTX US, was fully funded. The assets in that DCM, in the
clearinghouse, in the DCO were not lost, which is great. I
mean, it shows that regulation works, and that is why I really
commend this Committee and Congress for moving forward with
bipartisan market structure legislation. I think it is vitally
important that we protect investors and protect customer funds,
and intend to do so, if confirmed as Chairman.
Senator Lujan. Does vertical integration create risk?
Mr. Selig. Senator, vertically integrated structures are
one of the novelties that we are seeing in our markets today.
The CFTC's principles-based regime really allows for more
innovation in the way that businesses are structured, but, of
course, we need to comply with the same sorts of principles and
requirements. To the extent, of course, that a vertically
integrated structure raises, for example, conflicts issues,
they might be addressed differently, or there might be
additional requirements in place to protect against those
issues. The bottom line is that we should be always making sure
that the same protections are in place, that investors are just
as safe with a vertically integrated structure as without. If
confirmed, that is something I very much look forward to
considering and figuring out the best way forward there.
Senator Lujan. Is it fair to say, Mr. Selig, that under
your watch, you will not allow an FTX to happen again?
Mr. Selig. Senator, as I mentioned the other day, you know,
manipulation and fraud are only, you know, bounded by the
ingenuity of man, and so it is very hard to always be able to
prevent that.
Senator Lujan. Let me ask the question this way. Under your
watch, is it fair to say that if you identify a loophole that
would allow an FTX, fraud, criminals, crooks to exist, that you
will close them?
Mr. Selig. Senator, the CFTC will be a cop on the beat, a
strong cop on the beat under my leadership, and I intend to
always adhere to the law and make sure we are enforcing the
law.
Senator Lujan. Last, Mr. Chairman, my time is expired, but
illicit finance. I asked you, Mr. Selig, if you had a security
clearance, and you do not have one yet. You will need to get
one, I am certain, after confirmation. I suggested that you, as
immediately as you can, get in a SCIF and learn about all the
bad actors that are out there doing bad things.
One of the things that recently happened is the President
pardoned some guy. I do not know what the company's name is,
Sleaze? Same thing, CZ, yes, Sleaze. It is publicly noted at
the SEC and other places that terrorists were using this dude,
terrorists. Are you okay with that?
Mr. Selig. Senator, I am not familiar with all the facts of
the matter, but of course, I will always uphold the law and
ensure that we are enforcing the law on these contests.
Senator Lujan. Well, it is public facing. I will make sure
that I submit it into the record. We will get you the articles.
We will get you the SEC case. You are at the SEC now, correct?
Mr. Selig. That is correct.
Senator Lujan. You probably have more access to information
than I do over there. I really encourage you to see this
because the President says he really does not know this guy,
and the guy pled guilty to doing all kinds of ugly things. I do
not think anyone here wants to see any of this stuff. I
certainly hope that you keep your character when you are in
this position, as I shared with you in the office, and that you
are not asked to compromise yourself. You are a person of
character, Michael, and that is your reputation. I just
certainly hope you do everything you can to maintain that and
that you do good in this space. You are knowledgeable. You are
probably one of the most knowledgeable people going into this
space in a regulatory role, and it is going to be critically
important. We cannot get this wrong in the United States of
America. We cannot allow crooks to get away with things. We
cannot allow terrorists to get away with stuff either. I
certainly hope that we can work together in a strong bipartisan
way and make this happen.
I appreciate the work of the Chairman and my colleague here
to my--my seatmate, I will say, Senator Booker, with what they
have already put together here. I look forward to seeing more
of that good work, but just stay strong in this space as well.
Thank you, Mr. Chairman.
Chairman Boozman. We appreciate it, and I agree totally
regarding funding, making sure that we have adequate funding
for the agency.
Then, too, I think your other questions concerning FTX, all
of these other things, that is why we need to work hard to get
a good market structure bill that is good for the industry and
allows it to grow, keeps it here, but also, most importantly,
protects the consumer.
Then, too, I suggested the same thing regarding security
clearance, so it is good.
Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chair. Mr. Selig, thanks for
our visit prior to the meeting, appreciate it, a chance to
visit with you.
Before we talk about the digital asset issue for a minute,
very important that our farmers and ranchers be able to utilize
the futures market to hedge the crops they grow and the
livestock they raise, very important. That is your traditional
role. I want to hear from you how you are going to make sure
that we are making that system work as well as possible in an
open, clear, transparent way for our farmers and ranchers out
there that need to be able to rely on it.
Mr. Selig. Thank you, Senator. I very much enjoyed the
opportunity to meet with you this morning to discuss this and
other issues.
As I mentioned earlier, it is vitally important that we
protect our farmers and ranchers, ensure that they have the
tools they need to manage their risk, make sure these markets
are fair, orderly, and efficient, make sure there is not fraud
and manipulation that interferes with the prices of commodities
in these markets.
It is vitally important that we understand that many of
these markets have been massively overregulated throughout the
chain. We have seen FCMs introducing brokers and other
intermediaries highly, highly regulated, such that the costs
are being passed down to farmers, ranchers. We are seeing less
FCMs, less introducing brokers able to take on these clients.
You know, some of the ones with the large volume able to do it,
they are not banks, and some of the risk management functions
at the farmers' and ranchers' businesses, they are not willing
to work with these firms.
I think it is vitally important that we take a very hard
look at where we are regulating and making sure that it is
absolutely essential. I am in favor of the minimum effective
dose of regulation, no more, no less. We should not have more
reporting than is necessary. We should not have more
prescriptive requirements than needed. I do believe that if we
get the right regulation in place, these businesses will
thrive. We will see more risk management. We will see more
farmers, ranchers, and everyday individuals and commercial end
users using these tools, these risk management tools to manage
their business risks, and that is going to be better for all
Americans.
Senator Hoeven. Right, and for the large, sophisticated
users and that kind of thing, you know, they always manage to
figure out, you know, how to comply with all the different
rules, requirements, all that kind of thing. Are you focused on
making sure that for that family farmer or family rancher that
they are able to access the futures market in a way that they
understand, that is transparent, and that works for them?
Mr. Selig. Senator, absolutely. I think that is vitally
important. They need to have clear and simple rules of the road
that they understand, and they need to have access to the tools
that they need to manage the risk.
Senator Hoeven. In the digital asset space, have you looked
at both the House legislation and the proposed Senate
legislation? Does it provide you--in your opinion, does that
provide the statutory and regulatory--or the ability to build
the regulatory framework in a way that will make sure that,
again, there is transparency and that people understand what is
going on with these digital markets, and that, as Senator Lujan
said just a minute ago, that, you know, people are adequately
protected?
Mr. Selig. Senator, thank you. One of the areas that we
discussed earlier today is really the breadth of what is
happening in these digital asset markets. There is a wide range
of new types of blockchain networks, applications, and assets.
The legislation--I think this is a great, great effort to bring
clarity, certainty, and consumer protection to these wide-
ranging novel markets.
I believe that the legislation--you know, the efforts in
this Committee, as well as the Clarity Act and the efforts in
the House, are just absolutely critical. They provide the
scaffolding, the infrastructure that we need to make sure that
we have a registration regime, that we have requirements around
consumer protection, and also provide a lot of authority to the
CFTC and its sister agency, the SEC, to flexibly regulate.
There is going to be a lot of work to be done in implementing
these statutes, so I really am excited for you all to get the
legislation done, and I think these are both great efforts.
Senator Hoeven. Are you prepared to help Members of this
Committee make sure they understand what is being done in this
space and accomplished with this legislation, but also what
additional safety measures may need to be in place to get the
job done fully and well?
Mr. Selig. Senator, yes. I think one of the benefits of
having spent many years in private practice working with
digital asset firms and then working as Chief Counsel at the
Crypto Task Force at the SEC has been that I have seen and met
with many of these crypto businesses, understand both the good
and the bad and what we need to do to make sure that we are
protecting our investors.
Senator Hoeven. Thank you.
Chairman Boozman. Senator Booker.
Senator Booker. Thanks, Mr. Chairman. I just want to put
into the record that the witness appears to be so young that I
do not think he can drink alcohol should he get confirmed. I am
a guy in a job at 50 that you are still considered young in the
Senate, but this guy is----
Chairman Boozman. You are saying what I was thinking.
Senator Booker [continuing]. putting me to shame. Yes.
[Laughter.]
Senator Booker. Yes. I----
Senator Hoeven. Are you trying to say you are only 50?
Senator Booker. You are mean, sir. You are mean.
[Laughter.]
Senator Booker. Let his cruelty be noted for the record.
A lot of the staffers, sir, were whispering back here
wondering how old----
Senator Hoeven. I meant you look a lot younger.
Senator Booker. You do do that, sir. You do do that.
A lot of my questions have been covered. I am really happy
to see you here, and I am really encouraged by people on both
sides of the aisle that seem to have a lot of high hopes for
your leadership.
I want to jump right in. I am just grateful for the
Chairmen and the Ranking Members, they are the two of their
partnerships with me over the last few weeks. I am trying to
put together a discussion draft on spot digital commodity
market regulations has been really vital and I think really
important bipartisan work. Senator Klobuchar and Senator
Boozman have been phenomenal. I am just grateful for your work
over the last few months with the Administration working on a
policy related to digital assets, working with this Committee,
as well as Senate banking.
Even with rules of the road, you and I both know it is
critical that we have regulators that are capable, competent,
and who will both oversee the market and enforce the rules,
which we have already talked about at quite some extent. You
have spent the last seven months at the SEC, which is a much
larger regulator in terms of staffing scope and scale. You are
aware of this. The SEC has more than 5,000 full-time employees
versus the 600 at the CFTC, with about 1,500 FTEs in the SEC's
enforcement arm compared to just 161 here.
You have heard it from multiple Senators on both sides of
the aisle, with a couple hallelujah amens from the Chairman,
that there is a real problem right now with capacity in the
agency that you are up to lead. I am hoping that is something
you have heard, and I am hoping, as perhaps some of my
colleagues want, that you are more bold in asking, as we
hopefully get you more responsibility, that you start fighting
and standing up for more of the resources necessary to do
something that is really vital, especially when it comes to
issues of security and safety that Senator Lujan so eloquently
spoke to.
I remain deeply concerned also by a lot of issues of
corruption we are witnessing. I have a real problem that a
President of the United States could issue a coin. That, to me,
just opens up the door to a whole bunch of ethics problems. We
are seeing that right now with this White House. It is making
billions of dollars with foreign nationals investing in that
coin. I am really concerned about how agencies have lost a lot
of their independence and are being weaponized to go after
political enemies, that there is an undermining of regulators
and other government agencies that serve taxpayers. There is
politically motivated firings and more.
I am not even going to ask this as a question. I am just
going to say, should you be confirmed, I hope you will
prioritize this idea that Congress has had over generations now
that agencies such as yours should be independent agencies
above politics, really fighting for the best interests of
Americans, especially at an era where I think corruption is on
the rise in American Government, and a lot of people are
worried about trust. I just want to say that, for the record,
and I hope you can be that kind of leader that maintains that
kind of independence.
I want to get into some of the corruption we are seeing in
American sports right now. It would be hard to have missed that
in this past month, the FBI indicted several NBA and MLB
players that were trying to manipulate outcomes for profit. I
am a fan. As a college football player myself, the older I get,
the better I was, I must say, so I could have been in the pros,
too. The bad actors are caught because regulated sports books
caught the suspicious activity.
Given these recent events, it is all more concerning that
sports event contracts are being offered without the same
monitoring. All designated contract markets must comply
initially and on an ongoing basis with 23 CFTC core principles,
specifically core principle number three that requires
contracts must not be readily susceptible to manipulation.
You are going to be right there should you be confirmed,
and I want to make sure that you have strong integrity in your
monitoring systems in place to ensure athletes, coaches, league
employees and referees or any close family or friends or such
individuals are not manipulating America's pastime, America's
greatest sport, I would say football and more, and that is
something I wanted you to hear from me since we did not have a
chance to meet privately.
The last thing I want to go over is the greatest state in
America is--clearly, you agree with me, you could just nod your
head--is New Jersey. It is historic. Our great Garden State is
the East Coast home of gaming in the U.S. industry, employs
approximately 51,800 people, garnering close to $2 billion in
revenue. America should be thanking New Jersey more for all of
our great contributions to this public, but one of them is we
really did the work to legalize sports betting across the
United States. We were the ones fighting in court across this
last decade to get that legalization. New Jersey also fought
for years to bring sports betting into the legal fold, then to
be sued by those platforms and waste taxpayer dollars fighting
for the right to police this activity is frustrating for our
state officials and the 34 attorneys generals.
Again, it is very important to me, and I will end with
this, that the sports contracts have enforcement mechanisms,
with over half of the country's chief law enforcement officers
saying these contracts break state laws that we are seeing. I
am just frustrated that the CFTC has not acted. I will let that
be my real question to you after my statements.
Mr. Selig. Senator, thank you. I do look forward to getting
the opportunity to meet. I know we were unable to connect
yesterday. New Jersey, of course, is a great state. My wife,
sitting behind me, is from the state.
Senator Booker. You married up, obviously, if you married a
Jersey girl, sir.
Mr. Selig. That is right. As are actually--my parents,
actually, are from the area as well.
I think it is vitally important that the CFTC look to the
courts on a lot of these issues. They are, of course, being
litigated across the country. Really, to the extent that any of
these event contracts constitute gaming, of course, you know,
that is a question for the courts. If they are trading in our
markets, if the products are self-certified and the CFTC is
allowing them to trade in the markets, of course, it is vital
that the CFTC ensure that those contracts are not being
manipulated, that they are not readily susceptible to
manipulation. It is core principle. Of course, if confirmed,
that would be something that I would enforce.
Senator Booker. Well, you know, judges might hand down a
decision in agreement with Jersey and 34 state attorneys
general, and I am hoping that you will then follow those courts
order companies listing event contracts related to sports
events to stop operating in states in which the judges find
them to be contravening state gambling law. I am hoping we can
have a chance that you and I can discuss it. This is, you can
see, is a Committee that has a lot of bipartisan agreement, and
this is a space I hope you and I can have a dialog on. It is
such an important industry to my state. Thank you very much,
sir.
Chairman Boozman. Thank you.
Senator Slotkin.
Senator Slotkin. Thank you, Chairman.
Thank you for our meeting yesterday. Over here. I am at the
bottom of the dais. Thank you for our meeting yesterday. I
appreciated your time. The issues I asked you about in my
office are going to be the same issues I ask you here.
You have a background representing and working with the
crypto industry, a trillion-dollar industry. My issue is just
oversight and making sure that I can turn back to Michiganders
and say, if you are going to make the decision to invest in
crypto, you are safe. You are not going to be scammed. You are
not going to be defrauded out of that money.
The CFTC, since the 1930s, was set up as a five-
Commissioner body, you know, two Democrats, two Republicans,
and then whoever is in power gets the chairmanship. We are all
working on a market structure bill. I voted on a version of
that bill in the House, but that is when we had five
Commissioners who created this push and pull, this greater
sense of oversight. If confirmed, you will be the only one on
this body.
Can you help me understand--I know you said yesterday and
today you want to hear from different views. That is good.
Debate team, heard the whole thing. Do you support two
Democrats, two Republicans being with you on this Commission?
Mr. Selig. Thank you, Senator. As you know, and as I
mentioned yesterday, of course, I do very much appreciate
having different viewpoints, hearing from----
Senator Slotkin. I got that.
Mr. Selig [continuing]. everyone at the table, of course.
As I mentioned as well yesterday and earlier today, it is the
President's decision to nominate candidates to be----
Senator Slotkin. What would your advice to him be? I mean,
you are going to be the guy hanging out there by yourself,
right? This Administration has kind of systematically
dismantled independent commissions, the FTC, the Consumer
Product Safety Commission, the National Labor Relations Board.
They have been dismantled. Here we have a new industry, crypto,
you know, very, very kind of up and coming. I am supportive of
figuring out good regulation. Would your advice to him be like,
hey, man, give me some balance here so I have the ability to
say this is an independent body? What is your advice to the
President on this issue?
Mr. Selig. Well, Senator, I would certainly respect the
President's decision on these issues. My role and my job, if
confirmed as Chairman, is to fulfill the agency's mission, and
I believe that mission is best fulfilled when we have a
diversity of viewpoints coming from wherever we can find those
viewpoints.
Senator Slotkin. I get that and I--good. I am just saying
for those of us who want to get to yes on a market structure
bill, who want to be proactive, having some sense that there is
some oversight, that it is not just going to be you vulnerable
to the pressure of the President as the only one there, is
something that I think many of us will be watching, certainly
me.
On sports events contracts, Senator Booker can talk all
about New Jersey he wants. We are the number two. Michigan is
the number two online casino and sports betting state, $74
million annually. The tribes and our licensed sports prediction
markets are the ones who control that. My understanding is that
the CFTC regulations are clear on this issue, that sports
contracts should not be allowed because they are equivalent to
betting, right, to gambling. In your opinion, should sports
event contracts be listed through the CFTC?
Mr. Selig. Thank you, Senator. As I mentioned, this is a
really complicated issue. It is an interpretive question that
is working its way through the courts, and so I will respect
the decisions of those courts. I also am very interested to
work with this Committee to the extent that there are views
that we need to change anything in the statute. This is
ultimately a question for the courts. As a Chairman of an
agency, I will always look to the views of the courts and to
Congress. As the Supreme Court has said in the Loper Bright
decision, you know, the deference of the agency is limited. We
have to look to the courts.
Senator Slotkin. Okay. I appreciate that. You had said
yesterday you had not met with the tribes. I encourage you to
meet with the people who are in this business and just have--
again, if you appreciate alternative views, it should not be
hard to meet with these folks.
President Trump announced that he is launching his own
Truth Predict that would basically support event contracts and
that they be traded. If the President asks you for a carveout
or an exception so that Truth Predict can be listed, how will
you respond?
Mr. Selig. Senator, I always uphold the law and stick to
the law. I mean, to the extent that the President were to, in
compliance with this ethics rule, submit an application, he
would go through the same process as everyone else.
Senator Slotkin. That is true. I would hope that you would
be very careful about exceptions and the perception of graft
because he has invented this thing, and you would be the only
guy in the hotseat that he would have to get an exemption from,
so we will hold you to that.
Thank you, Chairman, and I yield back.
Chairman Boozman. Senator Schiff.
Senator Schiff. Thank you, Mr. Chairman.
In California and across the country, prediction market
platforms like Kalshi have been offering so-called event
futures contracts on sporting events. I know you have been
asked a great deal about this. I just want to drill down
further. Right now, I can go on Kalshi and predict who will win
tomorrow night's Thursday night football game between the Bills
and the Texans. If I spend $1 predicting who the next coach
will be of the New York Giants, I can make $6, sounds a lot
like gambling to me. These prediction markets are trying, I
think, to have it both ways, simultaneously marketing
themselves as financial products and marketing themselves as
sports betting. There is no economic utility to these
contracts. There is no price discovery being facilitated. They
are offering gaming products with no regulation, and I think
that is in violation of state law and tribal sovereignty.
The Commodity Exchange Act prohibits any event contracts
from being listed, traded, or cleared if, first, the contract
involves one of five enumerated activities, one of them being
gaming; and second, the contract is deemed contrary to the
public interest. The regulations implementing the CEA deem all
five of these enumerated activities as contrary to the public
interest. That is terrorism, assassination, war gaming, or
unlawful activity under federal and state law.
We have seen a proliferation of sports betting contracts,
sports event contracts being offered this year, even though the
vast majority of states say that offering these contracts
violates state and tribal laws. Meanwhile, the CFTC has failed
to issue any guidance on whether sport event contracts violate
existing regulations.
I understand that you will defer to the courts. I would
hope that you would defer to the courts and abide by court
decisions. What is your view on whether these are gaming in
violation or these are some kind of different contractual
obligation that has some kind of economic merit, intrinsic
economic merit?
Mr. Selig. Thank you, Senator. As you know, as a good
lawyer, the answer is always it depends, and these--that is why
these are questions for the courts. They are really complicated
issues of interpretation.
Senator Schiff. Well, let me make a simple one. Let's talk
about the Bills game tomorrow night. I go on my phone, on one
of these platforms, and I place a bet on who wins the game.
Gaming? Sports gaming?
Mr. Selig. Senator, it would be irresponsible for me to
prejudge that issue. I will look to the courts----
Senator Schiff. Well, let me ask it this way. If I were to
go into a casino and make a bet or a facility that legally
offers sports gaming and bet on the Bills game, should it
matter whether I am doing it in a licensed facility? Is it a
different animal if I do it on my phone through an app? Does it
change the nature of a gaming bet, what technology I use to
make it happen?
Mr. Selig. Senator, I again would look to the courts on
these questions of facts and interpretation of the law. It is a
complex issue. I will follow what the courts say. To the extent
there need to be changes because the law was drafted in a way
that is hard to comprehend, I am here to help with that effort.
Senator Schiff. Well, I mean, let me just ask--maybe even
break it down more simply. If you and I bet on who wins the
Bills game tomorrow, would you consider that gambling?
Mr. Selig. Senator, on this issue, I would look to the
courts, so I would look to what the courts say about that
issue. I think it is still working its way through, so once we
have an outcome that we can rely on and that we can interpret
within the agency, I would look to that.
Senator Schiff. Well, if betting on who wins or loses a
football game is not sports gaming, what do you think sports
gaming is? Can you give me an example that, okay, this is
clearly gambling, sports gambling? There may be some gray areas
and maybe some complex questions, as you say, but, okay, this
is certainly sports betting. What would you say?
Mr. Selig. Many lengthy legal opinions have been written on
one word in a statute, and I would really want the benefit of
understanding what the judges think about the issue. This could
be one that works its way all the way up to the top, and so I
will look to the courts on the issue.
Senator Schiff. Should I take it from your answer that you
are a tabula rasa on this? You are not coming into this
position with any preset ideas as to whether a future events
contract that predicts who wins a football game, you are not
coming into this with any preconceived idea whether that is
gaming or not?
Mr. Selig. I think it would be irresponsible for me to
prejudge that issue, and so I will come into the issue at the
Commission, if confirmed, with a blank slate and look to the
courts.
Senator Schiff. I would join with Senator Slotkin in urging
you to meet with those deeply impacted by this issue, which
includes the tribes as well.
Thank you, and I yield back, Mr. Chairman.
Chairman Boozman. Senator Warnock.
Senator Warnock. Thank you, Chair Boozman.
Congratulations, Mr. Selig, on your nomination. Welcome to
you and your family.
I have to say that I think you enter this nomination
process under a great deal of pressure. Congress has created a
five-person bipartisan Commission to run the agency of those
five seats. There is currently just one Republican Commissioner
left who, by default, is the acting Chair running the agency.
You are the President's second nominee, following opposition
from some of the President's richest friends to the previous
nominee.
I want to follow up a little bit on my colleague Senator
Slotkin's question and ask you, yes or no. Do you do you
believe having an incomplete CFTC, including zero minority
Commissioners, hampers the effectiveness of the CFTC?
Mr. Selig. Thank you, Senator. As I mentioned earlier, I do
believe it is important to have a diversity of viewpoints. The
CFTC has a vital mission that I intend to, if confirmed----
Senator Warnock. Is that a yes?
Mr. Selig. Senator, the CFTC is able to function with a
single Chairman, as it has been with an acting Chairman. I do
believe, as I mentioned, that it is very important to have a
diversity of viewpoints.
Senator Warnock. You think that this is a good situation
that we have a CFTC with one Chairman, even as we negotiate
crypto market structure legislation, which could grant the CFTC
new authorities to oversee a $4 trillion market?
Mr. Selig. Senator, I believe that it is important that the
CFTC carry out its mission. The way that it is designed, of
course, is that it can function with one Chairman, if
necessary, so that it can carry out its mission. I would take
that job very seriously, if confirmed.
Senator Warnock. Here is why this is so important. We are
currently negotiating this legislation. Many of us who are
engaged in these negotiations have called for a provision that
Commissioners from both parties be appointed for the CFTC to
implement any crypto legislation through new rules or
regulations. When I speak to leaders in the crypto industry,
they tell me that it is critical to them that crypto laws and
regulations have bipartisan support. This is what we are
hearing from the industry.
Do you agree that having bipartisan support behind new
cryptocurrency regulations would help ensure stability and
durability of these policies beyond this Administration and be
better for both the industry and the investors long term, so
that you are not suffering from whiplash, depending on whether
it is a Democratic Administration or Republican Administration?
Is that a fair assessment?
Mr. Selig. Senator, as I mentioned earlier, I really
commend the efforts of this Committee to develop bipartisan
crypto market structure legislation. I think both voices in the
room are critical to getting this right, and, if confirmed as
Chairman and assuming this legislation were to pass and be
signed by the President, the notice and comment rulemaking
process is a great way to get a diversity of viewpoints through
comments.
Senator Warnock. We are not getting any minority input from
the agency on how it would implement such a complex piece of
legislation, and that is making this whole process harder and
harder.
I am going to turn to another subject matter. Basic
consumer and investor protections are the pillars of a sound
financial system. Regulatory clarity is needed for consumers
who trade in digital commodities. Last week, Chair Boozman and
Senator Booker released a bipartisan discussion draft to
regulate digital assets. This discussion draft is an important
starting point, but key sections remain under negotiation,
including what new consumer protections are necessary to
protect consumers from bad actors. Investor protection is
critical, and the crypto markets are heavily focused on retail
investors. What new authorities does the CFTC need from
Congress to ensure consumers are treated fairly in your view?
Mr. Selig. Thank you, Senator. As I mentioned earlier, the
CFTC has existing authority to police fraud and manipulation in
these markets, but bipartisan legislation really can take that
to a further level by ensuring that we have market regulation
for these markets, so things like registration, examinations of
these platforms, making sure that consumer funds are safe and
secure, segregation of funds, things of this nature that we
have and expect in our markets today.
Of course, coming from the SEC, currently working well with
the SEC on the disclosure requirements to the extent that there
are securities that are being offered in connection with a
digital asset, making sure there is disclosure there, all these
things can work really well together to making sure that we
have a robust and resilient regime around crypto.
Senator Warnock. One last question. The CFTC is the only
financial regulator that is funded entirely by appropriations.
In the Boozman-Booker discussion draft, they authorize an
additional $150 million to the CFTC to hire new staff, improve
their technology, and prepare the agency to implement a massive
new regulatory structure. Do you support the authorization of
$150 million to the CFTC to implement a crypto regime as
designated by the Boozman-Booker discussion draft?
Mr. Selig. Thank you, Senator. If confirmed, I really want
to get in the seat and understand the needs of the agency, so
it would be premature for me to take a view on the exact amount
and what I support but----
Senator Warnock. Do you support any new funding for the
CFTC?
Mr. Selig. It would be premature for me to take a view on
new funding. I really want to understand the needs of the
agency. I think, you know, anyone coming into a seat with, you
know, many staff, many systems in place, I need to understand
the processes and who is there, and then I can make a decision
on that.
Senator Warnock. Well, I think it is an important question,
and, you know, we have got to have adequate resources in order
to protect consumers. I look forward to continued discussion on
this issue. Thank you.
Chairman Boozman. Thank you, Senator Warnock.
In regard to that, I think the Committee as a whole is with
you 100 percent regarding having adequate funding. We have been
talking to the Administration about that, how important it is,
and I will commit to you that, as we go down that path, we will
have a hearing if we need to, and, you know, we are going to
make sure that we do have adequate funding.
The other thing, too, was also recognizing the importance
of having Democrats and Republicans on the Commission. Again,
talking to the Administration, working with Senator Klobuchar,
Senator Booker, the next step is getting Senator Schumer to
actually nominate somebody. We want to go through the process
where, you know, it is not Republicans picking who you want,
but you yourselves, you know, Senator Schumer will nominate
somebody, so we are also working with him to get the process--
--
Senator Warnock. I am heartened by your commitment to a
bipartisan Commission.
Chairman Boozman. Yes.
Senator Warnock. Thank you so much.
Chairman Boozman. Yes. If the roles were reversed, you
know, I would be saying the same thing. Thank you.
Senator Warnock. Thank you.
Chairman Boozman. Senator Klobuchar, have you got any
other----
Senator Klobuchar. Yes. I just want to follow up on just a
few things. Should you be confirmed, Mr. Selig, will you commit
to working with Congress to ensure that the whistleblower
program is funded in a consistent and predictable manner?
Mr. Selig. Thank you, Senator. Yes, I will commit to that.
I think the whistleblower program is a very important program.
It helps align incentives when people are afraid to come
forward because of retaliation risk, and so I do think it is a
very important program.
Senator Klobuchar. Having worked at the SEC, would you
commit to--or I guess my better question would--how would you
approach coordinating with the SEC and Treasury on overlapping
issues to avoid regulatory gaps? I mean, obviously, this has
been a boiling up issue in the Capitol for quite a while, but
talk about your view on it.
Mr. Selig. Thank you, Senator. This is a really important
issue. I think it is critical that the SEC and the CFTC, and
other regulators as well all work well together. There are so
many products and services, and platforms that have fallen
through the cracks because it is just too hard to comply when
you are dealing with multiple regulators, and they do not work
well together. We have discussed today many of these
interpretive questions. Many of that is for the courts, but
sometimes the agencies have to make decisions together as to
what sits where, and I am committed to working well with my
current boss, Chairman Atkins at the SEC, as well as others
within the Administration to make sure that we get things right
for Americans.
Senator Klobuchar. Given that the CFTC was structured by
Congress as an independent commission, does it have, in your
view, an independent obligation to determine the legality and
the appropriateness of its actions and the regulations that it
adopts?
Mr. Selig. Senator, I think that is an important question.
You know, to the extent that the CFTC has deference authority
on certain issues where it has been granted that from Congress,
then the CFTC will go ahead under my leadership and interpret
where it is expressly told to do so. Of course, we will always
follow the law, and where it does not have deference authority,
of course, we look to the courts.
Senator Klobuchar. I mentioned event contracts in my
opening, and I know that some of my other colleagues have asked
about this. Once again, we are back to the resource issue, but
do you think the CFTC has the resources to oversee this vast
new market that presents different characteristics from the
traditional derivative markets?
Mr. Selig. Senator, as I mentioned earlier, this is a
critical aspect of the jurisdiction of the agency to the extent
it is added through the legislation, and the CFTC needs to take
that seriously. It has an important mission of making sure that
there is investor protection and that these markets are sound
and safe, so I take that mission very seriously. If confirmed,
we will take a very close look at our resources and make sure
that we have everything we need to fulfill our mission.
Senator Klobuchar. Okay. Thank you very much.
Chairman Boozman. Thank you, Senator Klobuchar, very much.
Again, thank you, Mr. Selig, for appearing before the
Committee. To our Committee Members, thank you for your
participation. As always, we appreciate the staffs on both
sides working so hard to make these things happen. The record
closes at 6 p.m. tonight.
Today's hearing is now adjourned.
[Whereupon, at 4:30 p.m., the Committee was adjourned.]
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November 19, 2025
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