() -U.S. Commodity Futures Trading Commission chair Rostin Behnam will step down when President-elect Donald Trump takes office on Jan. 20, the agency said on Tuesday, paving the way for Trump to appoint his own chief and kick-start a crypto policy overhaul.

While the CFTC, which oversees commodity derivatives markets, has traditionally been a junior player in financial policy, it is expected to play a much more prominent role as Trump’s administration pushes for more crypto-friendly rules.

Trump is expected to initially replace Behnam with one of the agency’s Republican CFTC commissioners – Summer Mersinger or Caroline Pham – as acting chair.

Trump’s transition team has also been considering external candidates, including former Republican CFTC Commissioner Brian Quintenz as well as former CFTC officials and industry attorneys Josh Sterling and Neal Kumar, according to two people with knowledge of the matter. A permanent chair would need Senate confirmation.

Spokespeople for Quintenz and Mersinger declined to comment. Kumar and Sterling as well as representatives for Pham did not immediately respond to requests for comment.

Behnam has been a Democratic commissioner at the agency since 2017, and was appointed to run the agency by President Joe Biden in 2021. Prior to his CFTC stint, he was a senior counsel to Senator Debbie Stabenow, a Democrat who chaired the Senate Agriculture Committee.

“Since 2017, it has been an honor and a privilege to serve the American public and the CFTC, first as a commissioner, then as chairman,” Behnam said in a statement.

CRYPTO OVERSIGHT

The CFTC under Behnam was seen as softer on the cryptocurrency industry when compared with crypto hardliner and Securities and Exchange Commission chair Gary Gensler.

But Behnam’s CFTC still brought numerous lawsuits against cryptocurrency companies, most notably the now-defunct crypto exchange FTX after it imploded in 2022 along with Binance — the world’s largest crypto exchange — and its founder Changpeng Zhao in 2023.

Trump has picked Paul Atkins, a Washington lawyer known for his crypto-friendly stance, as the next SEC chief.

Behnam told the Financial Times, which first reported his plans to step down, that regulation for the crypto industry remained insufficient.

“You still have a large swath of the digital asset space unregulated in the U.S. regulatory system and it’s important … that we fill this gap,” he said.

The CFTC remained “well positioned to be a spot regulator for digital commodity assets,” he said.

Under Behnam, the CFTC squared off with event contract marketplace Kalshi, rejecting the use of derivatives to bet on the outcome of political events such as the U.S. presidential election.

But a court ruled in Kalshi’s favor, boosting the popularity of election-related betting as Americans headed to the polls in November.

Behnam told the FT that he was concerned about the legality and social impact of bets on political and other events.

“The line is going to be very blurred about what is legal, what’s illegal,” he said, as technology and high retail demand drive growth in these markets.