CFTC Directs Enforcement Staff to Align Digital Asset Oversight with New DOJ Policy

Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline D. Pham has instructed the agency's staff and the Director of Enforcement to align with a recently announced Department of Justice (DOJ) policy aimed at ending "regulation by prosecution" across the digital asset industry. Under the directive, CFTC staff must comply with the President's Executive Order 14219 and adhere to the DOJ's charging considerations outlined in the memorandum titled "Ending Regulation by Prosecution." Acting Chairman Pham specifically directed enforcement personnel to refrain from charging regulatory violations involving digital assets—particularly registration requirements under the Commodity Exchange Act—unless there is clear evidence that the entity knew of the requirement and violated it willfully. Addressing ongoing litigation in U.S. federal courts, Pham noted that formal dismissal or settlement of cases requires a majority vote from the Commission, which currently has no majority party. Consequently, staff were directed to preserve limited agency resources by de-prioritizing active litigation involving registration requirements in the absence of willful violation evidence, and to ensure litigating arguments align with the new administration and DOJ policies. The directive builds upon broader shifts within the CFTC's Division of Enforcement under Pham's leadership. These changes include realigning enforcement task forces to focus on fraud, manipulation, and victim restitution, issuing updated guidance on self-reporting and remediation, and launching an initiative to resolve backlogged noncompliance cases that do not involve customer harm or market abuse. According to the CFTC, nearly two dozen firms have engaged with the agency under the resolution initiative.