CFTC’s Berkovitz to Step Down Next Month

Dan Berkovitz, one of the top officials at the Commodity Futures Trading Commission (CFTC), intends to depart the agency on Oct. 15.

Berkovitz announced his departure on Thursday, noting he has worked with the CFTC, Congress and the private sector over the past 20 years on financial markets, including with the Dodd-Frank Act. He has served as a CFTC commissioner since September 2018.

In a statement, the regulator thanked his fellow commissioners, the CFTC staff he worked with and the lawmakers whose work involves the agency.

“As the CFTC gained responsibility over the swaps market, and new products like cryptocurrencies have emerged, the staff has worked diligently to expand its expertise and capabilities,” Berkovitz said. “Today, the CFTC is both a national and a global leader in financial market regulation. This well-deserved reputation is largely due to our talented staff.”

The regulator has warned in the past that certain products built on decentralized finance (DeFi) may violate federal laws, pointing to derivatives in particular.

“DeFi markets, platforms or websites are not registered as DCMs [derivatives contract markets] or SEFs [swap execution facilities]. The CEA [Commodities Exchange Act] does not contain any exception from registration for digital currencies, blockchains or smart contracts,” he said in a speech in June.

He has also warned that there are no federal consumer protection regulations around DeFi trading platforms, and a lack of intermediaries may mean that certain protections that exist in centralized markets just don’t exist with their DeFi counterparts.

Berkovitz will be the second CFTC Commissioner to step down in 45 days. Brian Quintenz, who served as a commissioner for four years, left the role in August. On Thursday, it was announced that Quintenz had taken on a part-time advisory role with the crypto division at Andreessen Horowitz, the venture capital firm.

Former Chairman and Commissioner Heath Tarbert also left the agency earlier this year, after serving for two years.

With the departures, the CFTC is reduced to just two commissioners: Acting Chairman Rostin Behnam and Commissioner Dawn Stump.

President Joe Biden is reportedly considering Emory University Professor Kristin Johnson to fill at least one of the empty seats. Senate Majority Leader Mitch McConnell (R-Kent.) will likely also be able to nominate some individuals.

The CFTC can seat up to five commissioners (with one acting as the chair) at a time.