Key Issues for the Hearing

Nov 19 (Reuters) - U.S. senators are set on Wednesday to press Michael Selig, President Donald Trump's nominee to lead the Commodity Futures Trading Commission, about his plans to overhaul cryptocurrency regulations and election betting, among other hot-button issues.

Selig is currently chief counsel for the Securities and Exchange Commission's crypto task force and an adviser to Trump's Republican SEC chair Paul Atkins. His nomination follows a period of increased focus on the digital asset space, with the Trump administration signaling a more industry-friendly approach.

Political and Industry Context

Trump courted the crypto industry on the campaign trail with promises to be a "crypto president." His administration has since pushed for policies favorable to the sector, dropped probes into crypto firms, and signed into law a new regulatory framework for stablecoins. The CFTC, which oversees commodity derivatives markets, would also take a more active role overseeing the crypto industry if Congress passes a bill, dubbed the CLARITY Act, that includes proposed changes in crypto market supervision.

The White House withdrew its previous nominee for CFTC head, former Republican CFTC commissioner Brian Quintenz, who said in September that influential crypto entrepreneurs Cameron and Tyler Winklevoss urged Trump to stall his nomination. The pair, who donated to Trump's campaign, have not commented on Quintenz's statement.

The CLARITY Act and Regulatory Authority

Selig, in a post on X after his nomination, said he would "help the President make the United States the Crypto Capital of the World." A key piece of legislation central to this goal is the CLARITY Act. Passed by the House of Representatives in July and now under consideration in the Senate, the act would clear up a longstanding debate by defining when a cryptocurrency is considered a commodity versus a security. This would give the CFTC the authority to oversee crypto spot markets.

Selig is expected to be questioned about that bill, as well as how the CFTC would work with the SEC and oversee markets that allow Americans to bet on the outcome of elections and other events.

State of the Commission

The CFTC is traditionally led by a bipartisan group of five commissioners nominated by the president. The agency currently only has one commissioner, Republican Caroline Pham, who is also serving as its acting chair. Pham has indicated she plans to depart the agency once Trump's nominee for chair is confirmed.