CFTC Chair Heath Tarbert Announces Resignation

December 14, 2020 02:35 PM
Tarbert's resignation in January will have cut his original 4-year term by more than half
Crypto-focused media stories tend to describe Tarbert as pro-crypto, an easy trap to fall into
It’s not clear whether this resignation is bullish or bearish for crypto price and innovation
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Crypto was up for most of the weekend but was off modestly this morning. Spot volumes continue to decline and now are just about 35% of the 30-day average.

Crypto Story of the Day

Last week, sitting CFTC Chair Heath Tarbert announced that he would be resigning from his post after less than 2 years amid the U.S. presidential transition. Tarbert was heavily focused on crypto and, we had hypothesized, a significant driver of recent enforcement action in the space.

Tarbert was confirmed April 1, 2019 in what was meant to be a 4-year term. His resignation in January will have cut that by more than half. In his brief period as CFTC Chair, Tarbert was extremely busy bringing an agency record of 113 enforcement actions in calendar year 2020. His term followed that of Christoper Giancarlo, who had made crypto and fintech a legacy item — he actually began working in the cryptocurrency industry following his resignation from the post.

Tarbert made it clear that crypto would also be a focus, choosing to make his first public address as Chairman at a CoinDesk conference. Soon after that he famously stated his own belief, yet to be fully adopted by the CFTC, that ethereum (ETH) was a commodity and therefore under the jurisdiction of the Commission. That fact seemed to become more complicated as ETH appeared to commit itself to a proof of stake transition. However, Tarbert, in contrast to his counterpart at the SEC Jay Clayton, was actively trying to pull more of the crypto space under his purview.

Crypto-focused media stories tend to describe Tarbert as pro-crypto. This is an easy trap to fall into given the Chairman's focus on the space in addresses and so on. That said, Tarbert was definitely crypto-focused, but the outcomes of his decisions often had clear losers. The best example of this is the charges brought against BitMEX for operating an unlicensed derivatives platform in the U.S. despite the fact that the platform had geo-blocked U.S. users.

While Tarbert claimed to support innovation in the space, the CFTC's actions suggested that innovation was clearly intended to be on terms which aligned with the interests of the U.S. government. While there’s been regulatory uncertainty in the market with both Tarbert and Clayton stepping down from their posts in the new year, we'd argue it’s not clear whether the resignations are bullish or bearish for crypto price and innovation.

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