S.Hrg.119-99

1[Senate Hearing 119-99]2[From the U.S. Government Publishing Office]34                                                         S. Hrg. 119-9956                       NOMINATION OF THE HONORABLE BRIAN7                      QUINTENZ, TO BE CHAIRMAN AND A COMMIS-8                      SIONER OF THE COMMODITY FUTURES TRAD-9                      ING COMMISSION1011=======================================================================1213                                HEARING1415                               BEFORE THE1617                       COMMITTEE ON AGRICULTURE,18                        NUTRITION, AND FORESTRY1920                          UNITED STATES SENATE2122                    ONE HUNDRED NINETEENTH CONGRESS2324                             FIRST SESSION2526                               __________2728                             June 10, 20252930                               __________3132                       Printed for the use of the33           Committee on Agriculture, Nutrition, and Forestry3435[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3637                  Available on http://www.govinfo.gov/3839                                __________4041                   U.S. GOVERNMENT PUBLISHING OFFICE4260-686 PDF                  WASHINGTON : 20254344-----------------------------------------------------------------------------------4546           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY4748                    JOHN BOOZMAN, Arkansas, Chairman49MITCH McCONNELL, Kentucky            AMY KLOBUCHAR, Minnesota50JOHN HOEVEN, North Dakota            MICHAEL F. BENNET, Colorado51JONI ERNST, Iowa                     TINA SMITH, Minnesota52CINDY HYDE-SMITH, Mississippi        RICHARD J. DURBIN, Illinois53ROGER MARSHALL, Kansas               CORY BOOKER, New Jersey54TOMMY TUBERVILLE, Alabama            BEN RAY LUJAN, New Mexico55JAMES C. JUSTICE, West Virginia      RAPHAEL WARNOCK, Georgia56CHARLES GRASSLEY, Iowa               PETER WELCH, Vermont57JOHN THUNE, South Dakota             JOHN FETTERMAN, Pennsylvania58DEB FISCHER, Nebraska                ADAM SCHIFF, California59JERRY MORAN, Kansas                  ELISSA SLOTKIN, Michigan6061               Fitzhugh Elder IV, Majority Staff Director62                    Jessica L. Williams, Chief Clerk63                Lauren Santabar, Minority Staff Director64                 Chu-Yuan Hwang, Minority Chief Counsel6566                           C O N T E N T S6768                              ----------6970                         Tuesday, June 10, 20257172                                                                   Page7374Hearing:7576Nomination of The Honorable Brian Quintenz, of Ohio, to be77  Chairman and a Commissioner of the Commodity Futures Trading78  Commission.....................................................     17980                              ----------8182                    STATEMENTS PRESENTED BY SENATORS8384Boozman, Hon. John, U.S. Senator from the State of Arkansas......     185Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota....     28687                                WITNESS8889The Honorable Brian Quintenz, of Ohio, to be Chairman and a90  Commissioner of the Commodity Futures Trading Commission.......     491                              ----------9293                                APPENDIX9495Prepared Statements:96    Quintenz, Brian..............................................    289798Document(s) Submitted for the Record:99Tuberville, Hon. Tommy:100    Letter from UBS Financial Services Inc.......................    32101Boozman, Hon. John:102    Agriculture Group in support of Brian Quintenz, letter of103      support....................................................    33104    Crypto Council for Innovation, letter of support.............    35105    Foreign Exchange Professionals Association, letter of support    37106    Symphony Communications Services, LLC, letter of support.....    39107    Wholesale Markets Brokers' Association, letter of support....    40108109Quintenz, Brian:110    Committee questionnaire, Office of Government Ethics111      Executive Branch Personnel Public Financial Disclosure112      Report and 5-day letter filed by Brian Quintenz............    41113114Question and Answer:115Quintenz, Brian:116    Written response to questions from Hon. Amy Klobuchar........    78117    Written response to questions from Hon. Mitch McConnell......    79118    Written response to questions from Hon. Michael Bennet.......    80119    Written response to questions from Hon. Peter Welch..........    83120    Written response to questions from Hon. John Fetterman.......    84121    Written response to questions from Hon. Elissa Slotkin.......    87122123   NOMINATION OF THE HONORABLE BRIAN QUINTENZ, TO BE CHAIRMAN AND A124        COMMISSIONER OF THE COMMODITY FUTURES TRADING COMMISSION125126                              ----------127128                         TUESDAY, JUNE 10, 2025129130                                        U.S. Senate131          Committee on Agriculture, Nutrition, and Forestry132                                                    Washington, DC.133    The Committee met, pursuant to notice, at 3:08 p.m., in134Room 106, Dirksen Senate Office Building, Hon. John Boozman,135Chairman of the Committee, presiding.136    Present: Senators Boozman [presiding], Hoeven, Ernst, Hyde-137Smith, Marshall, Tuberville, Justice, Klobuchar, Bennet, Smith,138Durbin, Booker, Lujan, Warnock, Fetterman, and Schiff.139140   STATEMENT OF HON. BOOZMAN, U.S. SENATOR FROM THE STATE OF141 ARKANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION,142                          AND FORESTRY143144    Chairman Boozman. Good afternoon. It is my privilege to145call this hearing to order. I thank my colleagues for joining146us today. We will be considering the nomination of Mr. Brian147Quintenz to be Chairman of the Commodities Futures Trading148Commission.149    Mr. Quintenz, congratulations on your nomination. We150appreciate your willingness to serve. Also, throw in your151family's willingness to let you serve. These are certainly152family affairs.153    The CFTC is the only federal financial regulator that154oversees agriculture and energy risk management markets, and155the resiliency of the derivative markets are critical to our156commodity supply chains. Well-regulated and efficient commodity157markets help our producers manage risk. As our farmers face158elevated input cost, interest rate uncertainty, price159volatility, natural disasters, futures markets help producers160protect themselves.161    Over the years, the CFTC's pragmatic, principles-based162approach has resulted in a workable regulatory framework for163markets to function efficiently. The CFTC has historically164engaged in constructive dialog with regulated entities and165market participants, and this has built trust and confidence in166the CFTC. This constructive, flexible regulatory approach,167combined with diligent policing of the cash and derivative168commodity markets has resulted in the U.S. derivative markets169being the envy of the world. It is my expectation that the170Commissioners entrusted with leading the agency will continue171these practices that have served our country so well.172    At the same point, the role of the CFTC may expand as173Congress, including this Committee, considers granting the CFTC174authority to regulate the spot digital commodity markets.175Additionally, new markets and products such as prediction176markets and crypto-based derivatives have been developed, which177will require the Commission's attention.178    As I have said before, the CFTC is the right agency to179regulate spot digital commodity trading. The CFTC and only the180CFTC should regulate the trading of digital commodities. It is181because only the CFTC understands the unique characteristics of182commodities and commodity-based contracts. The market183knowledge, combined with its flexible, constructive regulatory184approach is why it is the right regulator for spot digital185commodity markets.186    I look forward to hearing from Mr. Quintenz on these187issues. Again, congratulations on your nomination.188    I now turn to Senator Klobuchar.189190  STATEMENT OF HON. KLOBUCHAR, U.S. SENATOR FROM THE STATE OF191                           MINNESOTA192193    Senator Klobuchar. Well, thank you very much, Mr. Chair. I194know we will be joined by several other Members. There are195already a number here.196    Thank you, Mr. Quintenz, for being with us today. I would197also like to welcome your family, including your parents, Ken198and Susan. I see them over there--and they seem proud of you, I199do not know, just so you know--your kids, Connor and Vivienne,200as well as Jenna, so thank you all for being here.201    The Commodity Futures Trading Commission plays a vital role202in ensuring the integrity of our financial and agricultural203markets. That includes protecting market participants from204fraud and manipulation; maintaining orderly derivative markets;205and enabling farmers, ranchers, manufacturers, and small206businesses to hedge against risk.207    We meet at a pivotal moment for the CFTC as it faces a208rapidly changing landscape across both derivatives and spot209markets. The agency is being called on to address not only the210emergence of novel financial products and technologies, but211also broader shifts in market structure, including the growing212influence of non-traditional platforms, as well as changes to213established platforms. These developments raise important214issues and important questions about the scope of the CFTC's215oversight and its ability to respond quickly and effectively to216risk in complex and fast-moving markets.217    To tackle these challenges head-on, I believe it is in the218public interest that the CFTC have not only a confirmed219Chairman, but also a fully functioning Commission with the220bipartisan balance and independent structure that Congress221intended. I cannot think of a more important time that we make222sure that happens.223    It is also essential that the CFTC have the institutional224capacity, both in staffing and resources, to fulfill its225mandate in the face of these emerging challenges. That means226protecting retail investors and other market participants, as I227noted, from fraud and abuse, guarding against systemic risk,228and ensuring transparent competitive markets. At the same time,229the CFTC must foster a regulatory environment that encourages230responsible innovation and adapts to new technologies without231compromising its core responsibilities.232    Mr. Quintenz, you bring valuable experience to this233nomination. You served as a CFTC Commissioner from 2017 to2342021, helping to steer the agency through major market stress,235including the WTI crude oil collapse and the early pandemic236volatility. You also led the agency's Technology Advisory237Committee and worked on policy issues at the intersection of238fintech and market regulation. You also have private sector239experience and, of course, we will be interested in recusal240issues for things that may be coming before the Commission.241    The next Chair faces a full agenda, from disinter mediation242and digital asset oversight to improving transparency in243Treasury futures and protecting retail customers in the wake of244recent failures. You and I have discussed several priorities245directly tied to the CFTC's core mission: safeguarding rural246co-ops and end users, strengthening coordination with other247regulators, and modernizing surveillance tools to better detect248market abuse before it harms consumers. I look forward to249hearing more from you about how you plan to pursue these policy250goals.251    Thank you again for being here, and we look forward to the252discussion. Thanks.253    Chairman Boozman. It gives me great pleasure today to254introduce the President's nominee to serve as Chairman of the255Commodity Futures Trading Commission, Mr. Brian Quintenz. I256would like to welcome his family who has joined us today, his257parents, Ken and Susan; children, Connor and Vivienne; and258partner, Jenna. We are delighted to have you all with us today.259    Mr. Quintenz brings considerable experience and260understanding to the CFTC that will serve him well as Chairman.261During the first Trump Administration, Mr. Quintenz served as262Commissioner of the CFTC after being unanimously confirmed by263the Senate in 2017. Mr. Quintenz has worked in the financial264markets and served as a thought leader on emerging markets and265innovative technology regulatory issues and began his career as266policy advisor for Congresswoman Deborah Pryce. Mr. Quintenz is267a graduate of Duke University and received his Master's of268Business Administration from Georgetown University.269    Again, thank you for being here. I now should administer270the oath, and then you will be able to begin your testimony271where you will have five minutes. Please stand, raise your272right hand.273    Chairman Boozman. Do you swear or affirm that the274statements you are about to provide is the truth, the whole275truth, and nothing but the truth, so help you God?276    Mr. Quintenz. I do.277    Chairman Boozman. Do you agree that if confirmed, you will278respond to requests to appear and testify before any duly279constituted Committee of the Senate?280    Mr. Quintenz. I will.281    Chairman Boozman. Thank you, and you are now recognized for282your statement.283284STATEMENT OF HON. BRIAN QUINTENZ, OF OHIO, TO BE CHAIRMAN AND A285    COMMISSIONER OF THE COMMODITY FUTURES TRADING COMMISSION286287    Mr. Quintenz. Thank you, Chairman Boozman. Thank you,288Ranking Member Klobuchar and Members of this Committee. It is a289true honor and privilege to be before you today as President290Trump's nominee to chair the Commodity Futures Trading291Commission, an agency that is near and dear to my heart.292    I would first like to recognize my family, my parents, Ken293and Susan; my children, Connor and Vivienne; my niece, Claire;294and my girlfriend, Jenna; as well as many friends and295colleagues who are here with me today. I would like to dedicate296my testimony to my late twin brother, Darren, and my friend,297Mike Gill, who served at the agency with me.298    I am deeply grateful to the President for the trust he has299placed in me to lead an agency that is vital and critical to300ensuring the resiliency and vibrancy of the United States301economy.302    As a nation, I believe we are at the precipice of a golden303age for innovation, for our derivatives markets, and for the304CFTC itself. This could prove to be the most exciting time in305the agency's history, as well as its most important. If I have306the honor of being confirmed, I look forward to working with307the Members of this Committee and your staffs, Members of the308House Agriculture Committee, market participants and309stakeholders, especially in the agricultural space, to ensure310that CFTC-regulated markets remain the most innovative, liquid,311and resilient hedging and price discovery markets on the312planet.313    This is the third time I have had the privilege of314appearing before this Committee as a nominee. The first two315were for my original appointment as a CFTC Commissioner, and on316both prior occasions, I was honored to receive unanimous317approval from this Committee and ultimately to have been318unanimously confirmed by the full Senate in 2017.319    When I was last before this Committee, I pledged to visit320farmers and ranchers, producers, and growers at their farms and321places of business. When I was a Commissioner, I traveled to322over a dozen states across the country, including to Arkansas323and Minnesota, to hear about our agriculture industry's use of,324access to, and concerns with derivatives markets. I again325pledge if I have the honor of being confirmed to continue to326visit farmers and ranchers across the country, as well as adopt327the longstanding practice of the CFTC Chair sponsoring the328Agriculture Advisory Committee.329    I am proud of the record that I established as330Commissioner, where I focused on three main objectives, risk,331innovation, and harmonization. Should I have the honor of being332confirmed to lead the CFTC, I pledge to continue the agency's333strong focus on risk innovation, as well as reciprocity with334foreign jurisdictions. Further, I will have no tolerance for335bad actors who do fraud, manipulate, or cheat in the CFTC's336markets. Customer protection has always been a key attribute of337well-regulated markets.338    The CFTC is a systemic risk regulator and oversees perhaps339the world's most systemically important financial entities,340derivatives clearinghouses. First and foremost, the agency must341remain laser-focused on meeting its systemic regulatory342mandate. In my experience, the CFTC is both the world's most343innovative financial regulator, as well as its most344technologically advanced. This is because of the Commodity345Exchange Act, which is by far the world's most innovation-346focused statute. The CEA's principles-based approach to347regulation and self-certification framework has created a348marketplace that continues to thrive with integrity, while349providing individual small businesses and large firms with new350hedging tools to better manage their financial, commercial, and351economic risk.352    Most recently, I served as the Global Head of Policy for353a16z Crypto, the crypto funds of venture capital firm354Andreessen Horowitz. This experience has provided me with three355invaluable insights to bring to bear should I have the honor of356being confirmed. First, I have traveled the world meeting with357other jurisdictions, regulators, and government officials,358where I learned what they have attempted to do, what they have359left to do, what has worked well or poorly in creating360regulatory frameworks for crypto assets and intermediaries.361    Second, I have had a direct line of sight into the future362of this technology and how it could transform our lives. I view363blockchain as a horizontal technology that has the potential to364touch every aspect of society, not just as a vertical365technology purely focused on financial services.366    Last, I have strong conviction that the surest way to367undermine U.S. global leadership in blockchain technology is to368let bad actors and fraudsters proliferate.369    I began my career here on Capitol Hill working for--working370as a legislative aide in the House of Representatives for 6\1/3712\ years. I have a deep respect for Congress. Should I have the372honor of being confirmed, I will seek to be a trusted partner373to you in your oversight responsibilities so that the U.S.374derivatives markets remain the best in the world.375    Thank you for your consideration of my nomination. I look376forward to answering your questions.377    [The prepared statement of Mr. Quintenz can be found on378page 28 in the appendix.]379    Senator Klobuchar. [Presiding.] Okay. Thank you. Senator380Boozman is going to be off to a meeting soon, so I am starting.381    The fast-paced innovation in the crypto space has led to an382ever-growing number of retail investors and consumers using383crypto. We all know that. While it is important to encourage384innovation, I want to make sure crypto oversight is robust, so385people are protected.386    Mr. Quintenz, what specific regulatory tools or approaches387would you use to ensure that innovation in cryptocurrency does388not come at the expense of basic safeguards and customer389protections for the public?390    Mr. Quintenz. Thank you, Ranking Member. First, let me say391I appreciate the time that we spent in your office and392recalling my trips to Minnesota and would pledge to continue to393do that, and I really enjoyed myself there.394    Your question is a very important one. Obviously, the395mission of the agency is critical. The agency oversees markets396that touch every segment of society and the economy from the397energy sector to the agricultural sector to the financial398services sector. We cannot take our eye off the ball there.399    Should the agency receive new oversight responsibilities400through Congress, I believe that the agency can take a401technology-first approach to that oversight where we can look402to ensure that the most up-to-date technologies are used so403that we can spend taxpayer dollars efficiently and effectively.404Any new additional headcount that the agency decides to commit405to that oversight is a 10X employee compared to what they406otherwise would be without that technology. As I said, this is407the most technologically advanced regulator on the planet for408its traditional remit, and there is no reason it cannot be the409same for crypto.410    Senator Klobuchar. Do you think you would need additional411funding and staff to write rules that would come out of any412legislation?413    Mr. Quintenz. I think it would be a challenge to----414    Senator Klobuchar. Not to mention oversight.415    Mr. Quintenz. It would be a challenge to undertake a lot of416that responsibility, certainly the oversight part once rules417come online. I think that the rule-writing groups within the418agency are smaller, but once rules come online, then there is419new authority there, there is new jurisdiction, and it has420usually been a precedent to accord the agency new resources.421    Senator Klobuchar. There has been a growing interest in422expanding derivatives market trading hours, 24/7 potentially.423The CFTC put out a request for comment. What is your view on424how the CFTC should approach this shift? Do you believe you425will need to revise its rules to accommodate these426developments?427    Mr. Quintenz. Thank you, Senator. It is another very428important and fascinating question. I think what we have seen429globally through technology is the advent of 24/7 trading using430a technological process that does not exist in the traditional431regulated derivatives markets. As the agency is looking to try432to allow for that same kind of trading within its existing rule433structure, there are different kinds of concerns that need to434be addressed such as----435    Senator Klobuchar. Well, like, for instance, price436dislocation, especially in lower volume markets like ag437markets. A lot of us----438    Mr. Quintenz. Sure.439    Senator Klobuchar [continuing]. are concerned on that440front.441    Mr. Quintenz. Sure, sure, of course. The agricultural442contracts have unique trading hours, different trading hours.443They have different trading hours between them. I think, for444instance, the corn contracts trade more frequently, whereas445other contracts trade along more traditional hours.446    I think the agency would want to ensure that we take the447view of all stakeholders into account, that we listen to the448people that use these markets, that the views of risk managers449and hedgers, especially in the agricultural space, are450paramount before we try to allow for or copy innovation and451then have it bleed through the system.452    Senator Klobuchar. Okay. Thanks. I had some retail customer453questions that are important I will wait for at the end, or454maybe my colleagues will ask them.455    Two remaining questions. One is on recusals conflicts, but456the first is on, given the CFTC was structured by Congress as457an independent commission, do you think it is appropriate for458the OMB Director, Director Vought, to play a central role in459reviewing the agencies and your performance in shaping spending460decisions and policy agenda? How does OMB's role relate to the461Commission?462    Mr. Quintenz. Thank you, Senator. I would commit that the463agency will follow all executive orders, and we will comply464with those. I do believe that it is important that the agency465conduct robust cost-benefit analysis and have the partnership466with other agencies, including OIRA and OMB, involved in that467process, and I would commit to that.468    Ultimately, should I have the honor of being confirmed, I469have a strong allegiance to and adherence to the statute, and I470care deeply about the mission of this agency, and that is what471I am going to tie my chairmanship to.472    Senator Klobuchar. Okay. You are currently the head of473policy for a16z Crypto, a venture capital firm investing in474crypto companies, and you are also on the board of directors475for KalshiEx, a first-of-its-kind exchange that allows trading476of event contracts. Crypto is likely, as you know, to be a477major subject of rulemaking, as we have discussed, and a16z or478one of its portfolio companies could be the subject of479enforcement investigations.480    The CFTC just ended its litigation with Kalshi, but events481contracts are also likely to be an issue before the Commission.482You have pledged to resign from these roles, divest your483financial interests, and recuse yourself from related matters484for one or two years. Please explain how you will carry out485your divestitures in the timeframes you agreed to, number one;486and then two, even if you recuse yourself and divest, there487will remain a potential appearance of a conflict. How will you488navigate these conflicts?489    Mr. Quintenz. Thank you. Thank you, Senator. If I could490just first say that when I was a Commissioner previously, I491held myself to the highest standards of ethics and integrity.492My reputation is critically important to me. I do not think I493would have had the opportunity in the private sector following494my time at the agency if that was not the case. I will abide by495all applicable ethics, statutes, and regulations. I have a very496robust ethics agreement that does require my divestiture. I497will have a screener in my office to ensure that no matter498inappropriately comes before me.499    There are a number of approved methods for divesting to500ensure that I can meet the timelines, and I am prepared to501explore all avenues to do that.502    Senator Klobuchar. Thank you. Senator Hoeven.503    Senator Hoeven. Thank you, Ranking Member.504    Thank you for being here and coming and visiting with me in505my office, and also for your willingness to serve another time.506I think that is a great thing, given that you have not only all507your private world and educational experience, but you actually508have on-the-job experience that you bring as well. I think that509is good.510    Our farmers do not control weather, prices, or markets, so511risk management is a huge thing to them, something you and I512talked about a little bit already. How we help them manage risk513is of paramount importance to this Ag Committee, and certainly514to me coming from an ag state, which is why we are so committed515to a countercyclical safety net, as well as enhanced crop516insurance, because those are risk management tools that make517sense for our farmers and ranchers.518    Talk to me about how you will engage with farmers and519ranchers to make sure that they are able to use CFTC and520hedging products to further manage the incredible risks they521face.522    Mr. Quintenz. Thank you, Senator. I also enjoyed my523conversation with you. Thank you for making time to visit with524me and discuss my trips around the country, including to your525state, and meeting with agricultural producers and end users.526In those travels, I heard often from the agricultural community527that the risk management derivatives markets are a critical528component of their hedging portfolio, a tool in a toolbox, but529it is certainly not the only one, and the others they rely on530are the ones you mentioned, the countercyclical programs and531the crop insurance programs.532    There is an interesting tie between the crop insurance533programs and our futures markets. I believe that they are--the534crop insurance programs are priced, you know, in the spring and535in the fall, and they base those prices on the futures markets.536If the agency is not doing its job and futures markets for537those products are not accurately reflecting supply and demand,538then we have two of those tools that are not appropriately539serving farmers and ranchers and needs. I would pledge to you540to ensure that the agency focuses on its true mission, that the541products that are listed that they use have integrity.542    Again, I would pledge to sponsor the Agricultural Advisory543Committee, which is a critical source of feedback from the544agricultural community around the CFTC's rules. I attended545every prior session that the Agricultural Advisory Committee546held when I was at--when I was a Commissioner, including547traveling for ones that we did outside of Washington, which I548have always viewed as a very important thing.549    Senator Hoeven. Having served in this role once before,550what are the most important things you learned last time, and551what are your priorities this time? What are you going to do to552really make a difference this second time around? What do you553want to accomplish here?554    Mr. Quintenz. Thank you, Senator. I think what I learned555last time--I learned a lot last time, but I would try to boil556it down into, number one, the agency has wonderful people. They557are dedicated to the mission of the statute and to the markets.558It is a small but mighty regulator. It has 650 people and559oversees a $350 trillion derivatives market and does it very,560very well. Perhaps, in my view, no one regulates markets better561than the CFTC.562    One of the reasons it can do that so well is because, as I563said, it is a technology-first regulator, and it has the most564advanced technology of any regulator that I have seen. The565agency is able to get real-time, customer-level data from566clearinghouses so that they can immediately understand567sensitive periods of the market and stress and reach out to568customers and intermediaries to understand whether or not there569is stress in the market that they have to oversee. I developed570a big respect for the agency, its mission, and its function in571meeting that mission and the statutory mandates.572    What I would like to do is, first of all, if it's not573broken, don't fix it. Make sure that we continue that critical574oversight over systemically important clearinghouses. Make sure575that we continue to allow for innovation in the marketplace.576Make sure that we continue to ensure that the core principles577of the CEA are being applied through both DCMs, the exchanges,578and the clearinghouses so that the new innovation that meets579the market is not inhibited by the agency, but that we can580ensure that those new markets do have integrity.581    Senator Hoeven. What is the biggest challenge coming at us,582the biggest thing that we are going to have to deal with on the583horizon, biggest single challenge?584    Mr. Quintenz. Well, I think it is, you know, the things585that we can expect and things we do not know about. Obviously,586the things we do not know about are the biggest challenges.587When I was at the CFTC previously, I do not think anyone really588saw the impact of the COVID pandemic coming, but there was a589period in March of 2021 or 2020 where the markets experienced590significant stress. In my view, the derivatives markets handled591that with flying colors. I do not want to minimize how592difficult it was for people in the markets and at--in the593intermediaries and at the exchanges, but the derivatives594markets performed very admirably.595    I think the--you know, the--what we can expect as a596challenge is new oversight from Congress potentially, making597sure that we are prepared for that, making sure that we take a598technology-first approach, and that we hit the ground running599if Congress decides to give the agency that authority.600    Senator Hoeven. Thank you. Again, I appreciate you being601here and look forward to working with you.602    Mr. Quintenz. Thank you.603    Chairman Boozman. Senator Smith.604    Senator Smith. Thank you, Mr. Chair, Ranking Member, and605welcome, Mr. Quintenz, to you and your family.606    When Congress established the Commodity Futures Trading607Commission, it designed the agency to be governed by a608bipartisan panel. You highlighted the strength of the Commodity609Exchange Act in your testimony, so I want to just hone in on610this a little bit.611    The provision in the Commodity Exchange Act says that ``not612more than three members of the Commission shall be members of613the same political party,'' and Presidents have fulfilled614Congress' intent by consulting with the opposite party to615maintain that balance when they are filling vacancies. I616believe you were first nominated to be a Commissioner by617President Obama, if that is correct, and President Trump618nominated two Democrats, and President Biden did the same thing619in nominating a Republican. As you know, there are currently620three vacancies on the CFTC, and two other Commissioners have621announced their intentions to leave.622    My question is, do you support maintaining the623bipartisanship of the CFTC?624    Mr. Quintenz. Thank you very much, Senator. I can speak to625when I was there, and when I was there and the people with whom626I served, I had a very, very close working relationship with627them. I deeply respect the Commissioners and both of the Chairs628with whom I served. We had a very deliberative dialog. We629exchanged views consistently. A lot of times we disagreed.630Sometimes we did agree, and sometimes I agreed with my Democrat631colleagues on issues that the Chair was doing or against what632the Chair was doing, and that was on both Administrations and633so----634    Senator Smith. Yes, that is the way it should be, probably.635    Mr. Quintenz. I did value that experience. I would pledge636to you that--and I think the other thing that is important for637me to say is that when I joined the agency, it only had two638confirmed positions there, a Chair and a Commissioner. When I639left the agency, it ended with a Chair and one Commissioner. I640would pledge to you that if I have the honor of being641confirmed, no matter what the makeup is, I will try to642replicate the experience that I had----643    Senator Smith. Yes.644    Mr. Quintenz [continuing]. with who is there, and I will645ensure that the agency meets its statutory mission.646    Senator Smith. Thank you for that. That is not exactly what647I asked. My question is whether you support maintaining that648bipartisanship of the CFTC. I think that is very important. You649know, the Ag Committee here operates frequently on a very650bipartisan basis. The issues that we work on are often not so651partisan. Sometimes we have regional differences. My question652again is would you urge the President to follow in the653longstanding tradition of nominating Commissioners to maintain654that bipartisan balance that is the intent of Congress, as laid655out in the Commodity Exchange Act?656    Mr. Quintenz. Thank you, Senator. The President is the head657of the executive, and the President will make his own decisions658with the advice and consent of Congress. I would pledge to you659that I will work with whoever is at the Commission----660    Senator Smith. Okay.661    Mr. Quintenz [continuing]. and keep the bipartisan spirit662of the agency alive.663    Senator Smith. Okay. That is disappointing.664    Let me ask you about something else. Consolidation in the665ag sector can be a real problem for farmers as they try to get666fair prices and make a good living. For seeds and chemicals,667mergers between the largest players over the past decade have668resulted in just three entities controlling 80 percent of the669U.S. corn seed market and 70 percent of the international670pesticide market. In cattle markets, our Committee has worked a671lot on this. Producers are sometimes making pennies on the672dollar due to lack of packer transparency and competition.673Meanwhile, consumers are paying more and more for beef at the674grocery store, while big processors, which control about 85675percent of the market, see soaring profits.676    Now, the CFTC plays a role in commodity price discovery as677part of its mission. Could you talk to me a bit about how you678see this role? The CFTC obviously does not have federal679oversight over mergers or antitrust issues, yet it seems clear680that ag concentration is a problem that affects our markets. Is681there a role for the CFTC here to play, helping producers get a682fair market value for their products?683    Mr. Quintenz. Thank you, Senator. I think that there is a684role for the CFTC to play, ensuring that the futures markets685and the prices and the transactions have integrity and686represent supply and demand and that it is--they are free from687corners and squeezes, which are a requirement in the act, which688I think goes to your point around consolidation and----689    Senator Smith. A fair market.690    Mr. Quintenz [continuing]. possibly market presence and691activity there. There are position limit rules that, when I was692a Commissioner before, we implemented for the first time in new693commodities to ensure that those markets had integrity and had694the same kind of protections from a position limit perspective695as other commodities. I will pledge to you to ensure that we696focus our attention on fair, orderly markets so that, again,697the prices in the futures markets reflect supply and demand for698the use by the end-user community.699    Senator Smith. Okay. Thank you.700    Chairman Boozman. Senator Tuberville.701    Senator Tuberville. Thank you, Mr. Chairman.702    Mr. Quintenz, thank you for being here today----703    Mr. Quintenz. Thank you, Senator.704    Senator Tuberville [continuing]. you and your family.705Thanks for your willingness to serve.706    You know, for the last four years, the Biden Administration707led an attack on cryptocurrencies and digital assets. It was708obvious to all of us. I think you know that better than709anybody. One of the ways they did this was by attacking leaders710in the digital asset industry like yourself. I am glad to see711that today we live in a new world with the most pro-crypto712President and Administration that we have seen. I am eager to713see you lead the CFTC as we enter the golden age of American714innovation and prosperity, and I look forward to supporting715your nomination.716    When you came by my office prior to this hearing, we717discussed how you were debanked because of your leadership and718stance on digital assets for years. My Democrat colleagues said719that this was not happening. Obviously, it was. You were even720sent a letter informing you that you were being debanked.721    Mr. Chairman, I would like to ask for unanimous consent722that the letter dated July 7, 2023, from UBS to Mr. Quintenz be723entered into the record. Thank you.724    [The letter can be found on page 32 in the appendix.]725    Senator Tuberville. Mr. Quintenz, would you like to discuss726this letter and the broader Biden Administration attack on727crypto?728    Mr. Quintenz. Thank you very much, Senator. I was very729disappointed to receive that. First of all, I would like to say730that the relationship manager financial advisor mentioned in731that letter is a trusted family friend, and I do not hold this732against him at all.733    I think the only reason why this would happen is because of734pressure from the regulators to debank a disfavored industry.735You know, these were accounts that were set up for my children736to receive $100 worth of stock from their grandparents for737Christmas, so I do not want to also overemphasize the pain that738it caused me, but I think it is endemic of what happened during739the last Administration that I do not think represented740American values.741    I know from personal experience that there were investments742that our firm was trying to make into small teams, and our firm743could not even send them a check because they could not open a744bank account because they were in the crypto industry. I745believe legal businesses deserve access to legal services, and746I am glad that that is starting to change.747    Senator Tuberville. Thank you. Probably a pretty tough748time, and I understand what you are going through. We are all749curious about the growth of prediction markets. Can you talk750about the benefits of the markets and how various businesses751and industries can use them for risk management when they752otherwise may not have access to appropriate hedging tools?753    Mr. Quintenz. Thank you, Senator. When I was at the754Commission, I read the law, and the law was clear that the755Commodity Exchange Act recognizes that an event that poses756financial, commercial, or economic consequences is a commodity.757I think the reason that the Commodity Futures Modernization Act758of 2000 that was passed into law, signed by President Clinton,759did that was because it recognized that events pose risks to760individuals, small businesses, and large firms in the same way761that exposure to physical commodity prices do.762    These have been hedged in various--events have been hedged763in various capacities for a long time. It has just been through764large Wall Street firms, through very complicated products765where there is not a lot of sight into how they operate and a766market trading mechanism to create clarity around that.767    With the way that this innovation is evolving, there are768going to be many new methods for individuals to be able to769hedge risks that they otherwise could not because the770innovation can be targeted to a specific event, and they do not771have to use some other generic form of hedging that may not772correlate to that risk.773    Senator Tuberville. Thank you. Can you discuss the774regulatory enforcement clarity between the SEC and the CFTC as775it relates to crypto and what further congressional actions776need to be taken?777    Mr. Quintenz. Thank you, Senator. As I saw when I was at778the CFTC and as I saw after I left, the agencies either share779jurisdiction over the crypto spot enforcement markets or780markets through enforcement, but really it has been the SEC's781decision to make in terms of which products are securities that782then they carve out and take into their own jurisdiction.783Unfortunately, I believe that there was not any clarity that784was offered to the marketplace and to innovators and785entrepreneurs to understand how they could build something that786complied with the law or how they could build something that787was within the SEC's jurisdiction that was able to follow those788rules.789    The--both agencies have had experience in the enforcement790area of crypto, but for the CFTC, it has mostly confined itself791to fraud, events of fraud, which are standard Ponzi schemes,792which is not necessarily people using cryptocurrency, but it is793saying that they are using cryptocurrency for investments and794then just stealing people's money. To the extent that new795clarity can be added so that innovators and entrepreneurs can796build compliantly I think is a critical thing for Congress to797consider.798    Senator Tuberville. Thank you, Mr. Chairman.799    Chairman Boozman. Senator Marshall.800    Senator Marshall. Thank you, Mr. Chairman.801    Mr. Quintenz, welcome to our meeting here, to our hearing.802    We all understand the critical--let me do this one803actually. You already answered that one. The CFTC's developed a804reputation for being tough as a regulator, but also we are805having a good relationship with market participants and being806reasonable to work with on regulatory applications, but some807market participants have complained that the Commission has808lost its way in processing basic applications for regulatory809licenses, which have been taking an inordinate amount of time810for approval. What is your view of the CFTC's responsibility in811basic application processes, and will you commit to ensuring812that the CFTC meets its deadlines in considering such813applications?814    Mr. Quintenz. Thank you, Senator. Let me say it was a815delight to spend time with you in your office and to recall816visiting Kansas, which I did a number of times, and again, I817would pledge to do so again and appreciate that discussion.818    The agency needs to meet its mandate, both to the statute819and to the markets, and part of its statutory mandate is to820ensure that any new applications meet the core principles, but821also to ensure for fair competition, which I believe means822processing applications in a timely way, and if they meet the823obligations of the statute, if there is not any reason to824believe that anything nefarious is going on as the Commission825is evaluating new applications, I believe that it should do so826expediently.827    Not having been at the Commission, I cannot speak to what828the delays are involving any applications that are there now,829but I would pledge to you and to the market to ensure that if830applications meet the standards of the act and meet the831standards for market integrity, the Commission will process832them expediently.833    Senator Marshall. If you are confirmed, is there a way that834you would go in and measure that and determine what is a835reasonable amount of time, and when you do not do that, you can836report back to us and say, here is why we are failing? Is there837a way to measure it, I guess?838    Mr. Quintenz. Yes, thank you, Senator. I have not839necessarily thought about that, but I think thinking, you know,840maybe a little bit off the cuff, I think, you know, one way we841could think about that internally is asking the reviewers for842applications how long it is taking them to respond with new843questions, you know, once the applicant has responded to the844previous set of questions to understand what--how long that845delay is.846    Another is just a conversation with the reviewing team to847see what is the status of these applications when they come848into the building. Are they robust, or are they very weak, and849is there a lot of work that is required? How many applications850are we getting in general, and how are those being sorted?851    Senator Marshall. Okay. If you cannot measure it, you852cannot manage it, so I hope you figure out a way to measure it.853    Senator Klobuchar touched on this question I am going to854ask next, and I just want to maybe see if I can understand your855answer a little bit more clearly. We all understand the856critical role that ag futures markets play in the risk857management for our farmers. You mentioned that you have been to858Kansas. It amazes me pretty small relatively sized farmers are859now using your services in a good way, but it is my860understanding that innovation in digital assets is driving the861CFTC to consider new market structures such as 24/7 trading and862perpetual future contracts. We have some concerns about that863back in ag land, that they raise significant concerns for864farmers and other traditional market participants. How do you865view the CFTC's role in both allowing responsible innovation866and ensuring traditional market structures are not exposed to867potentially harmful changes that could impact ag markets?868    Mr. Quintenz. Thank you, Senator. First and foremost, I869think it is critically important that the agency listen to the870end-user community and the agriculture industry to ensure that871we know very clearly what their preference is for how the872products that they use are traded. I think that there is the873opportunity for different kinds of innovations to affect874different industries at different times. There is no reason875that 24/7 trading, if it is allowed for and flourishes in one876area, has to translate to other areas. I think that is the case877now. I think the agricultural contracts have different trading878hours.879    Again, I would pledge to you to have a very open dialog880with the agricultural industry. I have heard these concerns881already from them around expanded trading hours and the882possibility of getting liquidated while they are asleep, the883possibility of liquidity and concerns, and I take those views884seriously.885    Senator Marshall. Great. I remember I think that the CFTC886was set up in many ways to serve agriculture, not necessarily887some of the newer Johnny-come-lately, so thank you.888    Mr. Quintenz. Thank you.889    Chairman Boozman. Senator Schiff.890    Senator Schiff. Thank you, Mr. Chairman.891    I want to start out by talking about futures contracts,892events futures contracts. I know this is a space you are well893familiar with from your role on the board of directors of894Kalshi.895    I am proud to represent more than 100 federally recognized896tribal nations in California that have the exclusive right to897offer gaming in California, and I am very concerned that these898event contracts, which seem pretty indistinguishable, at least899from the consumer point of view, violate--indistinguishable900from gaming, violate tribal sovereignty, undermine state and901tribal gaming compacts, and conflict with the Indian Gaming902Regulation Act. Federal law dictates that the tribes, not CFTC,903have exclusive rights to police gaming within their territory.904If you are confirmed, do you commit to exercise CFTC's905statutory and regulatory authority to call these contracts in906for review?907    Mr. Quintenz. Thank you, Senator. I appreciate the concerns908that you have mentioned. I think this is a--an area of the909marketplace that the agency used flexibility that it found in910the statute in a way that hampered its growth.911    I believe that the law is very clear about events that have912commercial or financial or economic consequence qualifying as913commodities because the act recognizes that, therefore, a914viable and valuable futures market can be listed upon them and915afford people the opportunity for risk management, price916discovery, and price dissemination, which are the three cited917national interests for the Commodity Exchange Act in Section9183(a).919    I would pledge to you, given that this is an area that has,920I think, more recently found legislative clarity given the921actions of the agency previously, that I would have a very922robust all-stakeholder engagement process around this. I would923listen to the concerns of the tribes that you mentioned.924Nothing in the CEA that I am aware of prohibits or affects the925opportunity of tribes to offer those products and those markets926and those services.927    Senator Schiff. Well, in my view, betting on the outcome of928a sporting event looks like sports betting, looks like gaming,929smells like gaming, sounds like gaming, there are winners and930losers like gaming, it is probably gaming. If, indeed, it is931determined that these contracts do amount to prohibited gaming,932violating tribal sovereignty and jurisdiction under the IGRA,933will you require the contracts to stop?934    Mr. Quintenz. Thank you, Senator. I need to--should I have935the honor of being confirmed, I believe that I need to abide by936the Commodity Exchange Act. If there is a conflict between the937Commodity Exchange Act and the other act you mentioned, I938believe that is best resolved through Congress. I believe the939Commodity Exchange Act is very clear about the purpose of940derivatives markets, the purpose of risk management and price941discovery, and that events can serve a function in that942mandate.943    Senator Schiff. If the courts determine that, in fact,944these are prohibited gaming contracts, will you enforce the law945and require the contracts to stop?946    Mr. Quintenz. I think that, depending on the outcome of the947court case and where that is in the court system, the agency948will follow the appropriate court mandate, but----949    Senator Schiff. Are you indicating that if the court should950rule that there are illegal gaming contracts, that you would951appeal because you personally disagree with the rule, or would952you recuse yourself having come from a gaming business that953would be affected?954    Mr. Quintenz. No, Senator. I think that I would need to--955and I think that the agency would want to ensure that it is956appropriately defending the Commodity Exchange Act and the957remit that the agency has to regulate and preempt laws--state958laws around futures and derivatives markets.959    Senator Schiff. Finally, you said you would encourage960community engagement. There was a commitment to hold a public961roundtable, and leaders were ready to fly out to attend it I962think in February, but it was abruptly canceled. If confirmed,963will you commit to holding this public roundtable?964    Mr. Quintenz. Yes, Senator. I have no information as to why965it was canceled, and I would be happy to reschedule it.966    Senator Schiff. Would you do that before you issue any967guidance on this topic?968    Mr. Quintenz. Since I do not have any plans to issue any969guidance in the near term, so I would feel comfortable making970that commitment.971    Senator Schiff. Thank you. I appreciate it.972    Thank you, Mr. Chairman. I yield back.973    Chairman Boozman. Senator Hyde-Smith.974    Senator Hyde-Smith. Thank you. Thank you, Mr. Chairman.975Thank you, Mr. Quintenz, for your appearance here. I enjoyed976our visit in my office, and we talked about a lot of things977about Mississippi. I really appreciate your willingness to978serve.979    Mr. Quintenz. Thank you.980    Senator Hyde-Smith. That is a lot, stepping up and having981to go through this process right here and many others, so thank982you for being willing to do that.983    I want to talk about something that has already been984discussed, the rapid growth with the digital asset sector. Of985course, we have seen an entirely new market emerge because of986that, bringing its new products, its market participants, and987the occasional bad actor at times, all culminating in more988significant work for the CFTC. I believe the Commission989deserves credit for how it has handled these new990responsibilities, and I believe the challenges ahead will only991grow with Congress considering legislation that could further992expand your jurisdiction as well.993    How do you plan to ensure the Commission remains focused on994its core mission of supporting well-functioning, transparent995futures, the markets that producers can rely on for risk996management?997    Mr. Quintenz. Thank you, Senator. It was a delight to visit998with you in your office and, again, recollect about my visits999to your state and Indianola and would love the opportunity to1000head back should I have the honor of being confirmed.1001    It is a very important question. The agency's markets, as1002they exist today, cover $350 trillion worth of hedging1003transactions and price discovery transactions that affect the1004real world economy in areas like--that depend on metals,1005energy, agriculture, different kinds of financial products like1006interest rates. There is no room to ignore or to let up on1007ensuring that the agency meets that critical mission,1008especially when it comes to our systemic risk mandate.1009    A lot of people I do not think appreciate the fact that the1010CFTC is a systemic risk regulator that oversees what I believe1011are the most important--systemically important institutions,1012financial institutions in the world. We have no--I would have1013no tolerance for ignoring those markets, and I would pledge to1014ensure that the agency's full attention and historic attention1015is placed there.1016    Senator Hyde-Smith. Thank you. Over the past few years, we1017have seen growing public interest in prediction markets, and1018not just for trading but as tools for forecasting, academic1019research, and even policy analysis. At the same time, questions1020have been raised about where to draw the lines, around what1021types of events are appropriate for public contracts, and what1022falls outside the scope of the CFTC's mission.1023    If confirmed, how do you believe the Commission should1024approach prediction markets, particularly when it comes to1025balancing innovation with the need for regulatory clarity and1026market integrity?1027    Mr. Quintenz. Thank you, Senator. I think the last thing1028that I would want to do, should I have the honor of being1029confirmed, is to be a value judgment regulator, try to express1030my own value judgments on a marketplace and undertake a process1031that is opaque and inconsistent and likely illegal. In the1032past, the agency has taken an approach that I had disagreed1033with in terms of that--adjudicating which kinds of contracts1034may be acceptable or not.1035    I believe that it is the role for this body and for1036Congress to decide what is acceptable or appropriate. I think1037it is the role for the agency to follow the statute. The1038statute, as I have said a number of times, is very clear that1039it is the purpose of the Commodity Exchange Act and the purpose1040of the CFTC to support derivatives markets that provide for1041hedging, risk management, price discovery, and price1042dissemination. I would try to take a very clear approach that1043is predictable, repeatable, durable, and legal.1044    Senator Hyde-Smith. Thank you. Thank you, Mr. Chairman.1045    Chairman Boozman. Senator Booker.1046    Senator Booker. Thank you so much, Mr. Chairman.1047    I am looking forward--I hope I can get to what is really1048one of my missions, which is to get a market structure bill1049here done and talk about the CFTC's role in crypto oversight. I1050want to pick up on a line of questioning, which I thought was1051excellent questioning by my colleague, Senator Schiff.1052    I have a lot of reservations, I have to say, about the1053explosion in advertising for sports betting, some of the1054addictive-by-design tactics employed by the industry. It is1055ultimately the law of the land. Should you be confirmed, you1056are going to have a very important role to play in this1057emerging space.1058    We now know that Kalshi, who we have been discussing, they1059are having significant efforts to offer event contracts on1060sports events, which closely resemble sports betting. Now,1061Kalshi's own advertising--I looked at Instagram--says, ``Sports1062betting legal in all 50 states on Kalshi.''1063    I just want to talk a little bit about your independence in1064this space. Now, you gave the following statement while you1065were a CFTC Commissioner. ``The statutory definition of1066commodities includes an occurrence, extent of an occurrence, or1067contingency that is (1) beyond the control of the relevant1068parties to the contract; (2) associated with a financial,1069commercial, or economic consequence.'' (3) since practically1070any event has at least a minimal financial, commercial, or1071economic consequence, all events are commodities. Because of1072this definition, any contract on the outcome of a future event1073would be considered a commodity futures contract and, pursuant1074to the Commodities Exchange Act, is required to be traded on a1075registered designated contract market.'' Do you still agree1076with that statement today?1077    Mr. Quintenz. I do.1078    Senator Booker. Okay. Help me understand, does that mean it1079would be illegal for sportsbook or tribal communities to take1080bets on sports outcome in New Jersey or California or Nevada1081unless they are registered with CFTC exchanges?1082    Mr. Quintenz. No, Senator. The quote that you read may have1083omitted a critical detail, which is if those contracts are1084traded across state lines.1085    Senator Booker. Okay. To me, I just, on the face of it,1086even with the omission that you just speak to, I just feel like1087it is undermining the clear language of the Commodity Exchange1088Act, which states that ``Event contracts involving gaming shall1089not be listed if the CFTC determines that they are contrary to1090the public interest.'' Would you agree with that?1091    Mr. Quintenz. There is a special rule for the review of1092event contracts, yes. It does mention specific kinds of events1093that could trigger----1094    Senator Booker. Right----1095    Mr. Quintenz [continuing]. that review.1096    Senator Booker [continuing]. and you would have a role in1097this position----1098    Mr. Quintenz. Yes, Senator.1099    Senator Booker [continuing]. on determining this space?1100    Mr. Quintenz. Yes. Although I would say--and I have spoken1101about this. I had a very, very long statement when I was a1102Commissioner previously on this, that that provision of the1103statute troubles me in terms of trying to execute it with1104repeatability and legality, especially in a post-Loper Bright1105world because there is no framework that was provided for by1106Congress in terms of how to execute that appropriately. What1107constitutes the public interest? What constitutes an1108appropriate kind of----1109    Senator Booker. I agree, but you are going to be in this1110space, and I am hoping that we can talk more, not in the last1111two minutes that I have, about the role, power, and authority1112you will have in this space. I hope you can appreciate that1113there will be some real questions to your independence in that1114role, given the fact that you sat on the board of this--you can1115understand that there would be concerns about that, yes?1116    Mr. Quintenz. I can certainly understand, and I think that1117is why----1118    Senator Booker. Let me add, because I am running out of1119space. I told you where I want to try to go, but Donald Trump,1120Jr. was hired by Kalshi on January 13 after his father was1121elected President of the United States nine days before it1122began offering sports contracts, one week, again, before1123President Trump was inaugurated. I am worried that you are1124going to be in a position where, if Chairman, are you going to1125feel empowered to prosecute a company or push back on a company1126that is being advised by the President's son? This deserves1127some exploration.1128    I want to be able to ask you one last question, but there1129is a lot more here that has to be discussed as I am hearing1130from a lot of parties that are questioning the independence.1131Given the culture of corruption that I believe we are seeing in1132our country right now where a President has a meme coin that is1133being invested in by foreign companies, where Americans are1134justified in wondering the influence that is having on our1135policy, you are sitting in a position coming from a company1136with the President's son, we really have to explore that more,1137and I am hoping that the Chairman and the Ranking Member would1138want to.1139    I very much really want to spend my time working on getting1140that market structure bill. I really want to talk to you more1141of it. I am out of time now, but I am hoping you will be1142willing to have a conversation as my Subcommittee on this1143Committee really is focused on driving something forward. This1144is an area that needs regulation. This is an area that needs1145rules that we can create a lot more transparency and a lot more1146trust. That right now in this space of digital assets, the1147space of sports betting with a lot of things happening in1148America that have never happened before with the President so1149intertwined and his family so intertwined in areas that are1150seeing extraordinary profits right now, it is very important1151that we have the objectivity necessary to govern in this space,1152and I hope we can talk about that more.1153    Mr. Quintenz. I would pledge to have that conversation with1154you and to have that relationship.1155    Senator Booker. Thank you.1156    Chairman Boozman. Senator Justice.1157    Senator Justice. Thank you so much, Mr. Chairman, Ranking1158Member, and our colleagues.1159    I want to just say just this. We have the opportunity to1160nominate a fellow here that is the real deal. I mean, Brian1161Quintenz is the real deal. I would just say just this. From the1162standpoint of our questioning and everything, I wish to1163goodness that we could someway, somehow move ahead and leave1164the politics on the sideline. You know, I truly believe that1165this is a business guy. This is a farmer. This is a guy that1166absolutely values the ability that farmers--and I am one of1167them--have to be able to hedge our products and to be able to1168watch what is going on in the grain world or whether it be the1169lumber world or the energy world, and that value to us is1170really important.1171    Now, I have got to say just this too. He knows how to1172safeguard us from the standpoint of we in Congress, first and1173foremost, but then the CFTC, we need to ensure the bad actors1174do not become at play and they absolutely--we have got to1175someway, somehow prevent manipulation that could really cause1176us all a problem.1177    Now, let me just say just this. I am a believer in crypto.1178I am a believer in where we are going to go. I believe that it1179is a future that absolutely provides an opportunity to this1180Nation that is off the chart, off the chart in all kinds of1181ways. You know, I do not think we can pass the GENIUS Act any1182faster than--I mean, I am the most impatient guy in town all1183the time, and I think we need to get across the finish line1184right now.1185    Here is my question, sir. I really believe that our1186Chairman is the real McCoy, and I believe absolutely right1187behind all of that, I believe that from the standpoint of1188market structure, market structure is hanging in the looms. You1189see, really the crypto world today needs us to stand up and say1190legitimate, legitimacy. That is the very first thing that needs1191to happen. Then right behind that, we need to absolutely be1192sure--and I always call the voters Toby and Edith, so forgive1193me--but we need to ensure that absolutely Toby and Edith know1194that they have access, that absolutely they understand--they1195come into our world.1196    With all that, I would say to you, sir, just this. You see,1197I think the next step forward with market structure is1198terribly, terribly important. Tell me your feelings.1199    Mr. Quintenz. Thank you, Senator. I completely agree with1200you. I think--as I think about the crypto ecosystem, the crypto1201market, and the historical role for financial regulation, you1202know, there are--and as I reflect on kind of a philosophical1203approach to financial regulation, usually, people come down on1204one side or the other between being pro-innovation or pro-1205customer protection. There is certainly a very strong middle1206ground there, but usually, you know, you can think about, you1207know, favoring one, you know, over the other, and the extreme,1208you know, pro-innovation philosophy is a very libertarian1209philosophy, and it does not matter how many people get harmed.1210In a pro-customer protection philosophy, it is a precautionary1211principle approach where you have to prove that nothing bad1212will ever happen, which means you never have innovation at all.1213Usually, things come down in the middle, and you have to take1214some kind of choice.1215    I have always viewed market structure legislation as an1216opportunity to be both pro-customer protection and pro-1217innovation at the same time because it can provide the clarity1218to builders, entrepreneurs, innovators to develop products that1219can become networks, that can become decentralized, and that1220can allow people to own how they participate in those networks,1221while at the same time ensuring that firms that are central,1222that are businesses, that service customers and require1223customer trust are appropriately regulated, which is the1224hallmark of financial regulation that we have had in this1225country for decades, if not centuries.1226    I feel like we can do both at the same time, and I would1227pledge to you that if the CFTC gets authority, it will be1228ready.1229    Senator Justice. I would answer bingo. That is all there is1230to it.1231    Mr. Chairman, I am a full believer if someway, somehow, we1232could move forward, because the opportunity is right at our1233fingertips, if we could move forward with both today, it would1234be the right move to do. Thank you so much, sir.1235    Mr. Quintenz. Thank you.1236    Chairman Boozman. Thank you. Senator Lujan.1237    Senator Lujan. Thank you, Mr. Chairman.1238    Mr. Quintez--is it Quintez or Quintenz, sir?1239    Mr. Quintenz. Quintenz.1240    Senator Lujan. Quintenz.1241    Mr. Quintenz. Quintenz. Thank you for being with us today,1242and appreciate your family being here as well. It takes a lot1243out of your days as well to travel around with family, and it1244says a lot that family is with you in my opinion, sir.1245    Now, as you have heard today, and as you know, Brian,1246Congress is grappling with a common issue here. How do we build1247a regulatory structure around something that is new and1248technology that is advancing? Now, in this case, specific to1249cryptocurrency, one of the conversations that I have been a1250part of is how can we foster American innovation while also1251protecting consumers, looking at creating the strongest1252environment anywhere in the world in America.1253    Now, the Committee has done important work to think through1254some of the hard questions on what a robust regulatory1255environment would look like. Now, I want to ask about your view1256on how CFTC would approach this task. Now, as you know, the1257CFTC is a small agency compared to the SEC. Yes or no, do you1258believe if the CFTC was given more explicit authority over1259digital assets, would the agency need more resources, including1260staff and infrastructure?1261    Mr. Quintenz. Thank you, Senator. I should say yes to that.1262I think that it is--it is precedential that new jurisdiction1263comes with new resources. The historical remit of the agency,1264as I have described many times, is critically important. We1265cannot take our eye off of that ball. To the extent that new1266authorities come to the agency, I think there are ways that we1267can make every taxpayer dollar spent the most efficient way1268possible, but I would anticipate that new resources would1269likely be needed.1270    Senator Lujan. I agree with you. Now, if you are confirmed,1271or I should say when you are confirmed, would you seek more1272appropriated funds if you needed it to respond to a rapidly1273growing crypto market?1274    Mr. Quintenz. Thank you, Senator. I would be very1275transparent with you and your colleagues on this Committee1276about what I felt the needs of the agency were. I think former1277Chairman Russ Behnam did create his own budget request that I1278think called for $120 million increase in the first year that1279then scoped down to $60 million. I do not have any visibility1280into what went into that, but I would want to review it and1281either adopt some of it or maybe redo it from a different1282perspective, but ensure that, again, we would take a1283technology-first approach to that and we would ask for what we1284needed.1285    Senator Lujan. I appreciate that. Now, anti-money launder1286regimes, which digital asset companies have to prevent their1287platforms from being used for illicit activities. If confirmed,1288how will you work to oversee digital asset providers, AML1289regimes, now that the United States Department of Justice has1290deprioritized pursuing regulatory violations like compliance1291with Bank Secrecy Act violations associated with money1292laundering and other commodity laws on digital asset companies?1293    Mr. Quintenz. Thank you, Senator. Yes, so entities1294regulated by the CFTC currently, you know, qualify, I believe,1295as financial institutions and therefore have to have AML/KYC1296programs supervised by the Financial Crimes Enforcement1297Network, FinCEN.1298    In the crypto ecosystem, any intermediary or centralized1299business that has a customer relationship that accepts and1300transmits customer funds qualifies as a money services business1301and is also under, you know, FinCEN's remit. I would imagine1302that both of those things, if Congress decided to pass a new,1303you know, regulatory authority, would not change.1304    Senator Lujan. I appreciate that. I am concerned from this1305announcement from the Department of Justice. You know, there1306are criminal networks out there involved in human trafficking.1307Fentanyl is exploding, taking our constituents every day. I1308believe that if bad folks anywhere in the world want to do1309something, because they are making a dollar, they are going to1310keep doing it. They are going to keep laundering money,1311whatever it may be. For the United States to take its eye off1312of money laundering just seems like a big mistake. All eyes are1313going to be on CFTC in this particular space to make sure that1314we are able to get that right and that we do not let bad people1315do bad things.1316    Mr. Chairman, I have some other questions in and around1317sports gambling. You know, the Supreme Court decision a few1318years ago said that it was states, not the Federal Government's1319decision to allow for sports betting. Many states passed local1320legislation, things of that nature. New Mexico is one of those1321that immediately responded. I will submit those into the record1322as well to be respectful of my colleagues' time.1323    I really appreciate you being here today. Thank you very1324much.1325    Mr. Quintenz. Thank you, Senator.1326    Chairman Boozman. Senator Warnock.1327    Senator Warnock. Thank you very much, Mr. Chair.1328    Congratulations, Mr. Quintenz, on your nomination.1329Congratulations not only to you but to your family.1330    Mr. Quintenz. Thank you.1331    Senator Warnock. In March, President Trump violated the law1332by firing the two Democratic Commissioners at the Federal Trade1333Commission without cause. Then in April, President Trump1334ignored the law again and fired the two Democratic Board1335Members at the National Credit Union Administration, again1336without cause. These seats remain vacant, and there will soon1337be more Democratic vacancies at the FDIC, the Securities and1338Exchange Commission, and the CFTC, the Commission, of course,1339you have been nominated to Chair. Is it correct that you were1340originally nominated by President Obama?1341    Mr. Quintenz. Yes, Senator. I was nominated twice1342previously by President Obama and by President Trump.1343    Senator Warnock. Right. A Democratic President initially1344nominated you to fill a Republican seat on the Commission. Is1345that correct?1346    Mr. Quintenz. That is correct.1347    Senator Warnock. During your term as a Commissioner at the1348CFTC, can you think of an example of any business before the1349Commission that was improved by having both Democratic and1350Republican Members at the table?1351    Mr. Quintenz. Thank you, Senator. In response to another1352question, I can only speak to the people and the environment in1353which I had served previously. I had a very, very strong1354relationship with my fellow Commissioners and both of the1355Chairs under which I served, very cordial. I count them all as1356dear friends. Now, a number of occasions we disagreed, but on1357some occasions, we did agree.1358    Senator Warnock. Do you think that disagreement is helpful1359and healthy? Do you think there is some benefit to having a1360bipartisan board?1361    Mr. Quintenz. I think there can be. I mean, I thought I was1362right, but, you know----1363    Senator Warnock. You embody, in some ways, the trajectory1364of your work on this Commission, nominated by a Democratic1365President, filled a Republican seat. I think Democratic boards1366play an important role, and I think that the friction in points1367of view is helpful. Would you agree with that?1368    Mr. Quintenz. Again, I think it can be, Senator, sure.1369    Senator Warnock. I will accept that. It can be. I think1370this is a bad precedent set by President Trump, and I am1371worried that it imperils the actual independence of many1372crucial regulators, including the CFTC. Americans need to know1373that these agencies work, regardless of who the President is,1374and I think there is a certain kind of credibility that comes1375with this kind of bipartisan spirit in the work.1376    The CFTC currently has three vacancies. Do you support1377President Trump nominating a full CFTC, including Democratic1378Commissioners?1379    Mr. Quintenz. Thank you, Senator. The President is the1380Chief Executive, and that is----1381    Senator Warnock. I think it is a pretty simple question.1382    Mr. Quintenz. That is----1383    Senator Warnock. Do you support--that is really a yes or no1384question. Do you support President Trump nominating a full1385CFTC, including Democratic Commissioners?1386    Mr. Quintenz. I would pledge to you to have--try to emulate1387the same environment of the Commission, should I have the honor1388to be confirmed, that I got to experience when I was there with1389whoever is serving with me.1390    Senator Warnock. I think I asked you a pretty easy1391question. If confirmed, will you advocate to the White House1392for the President to nominate and the Senate to confirm both1393majority and minority Commissioners to the CFTC?1394    Mr. Quintenz. Thank you, Senator. With respect, the1395President is the chief executive, and he can make that decision1396with the advice and consent of Congress.1397    Senator Warnock. Yes, I understand he makes the decision.1398Would you advocate for it?1399    Mr. Quintenz. I do not tell the President what to do, sir.1400    Senator Warnock. If the President continues to ignore1401precedent and the law and never nominates a Democratic Member1402of the Commission, which ignores precedent, it ignores the1403law--you will be the Chair of the CFTC; you will get1404confirmed--so how will you as Chair work to moderate then the1405CFTC and incorporate dissenting and minority viewpoints in the1406Commission's decisions?1407    Mr. Quintenz. Thank you, Senator. With respect, I do not1408want to speak to all the different kinds of hypothetical1409environments that the Commission may experience, but I would1410pledge that--one of the core attributes of the Administrative1411Procedures Act is to put out any kind of rules and notices for1412public comment. Responses to public comment need to be1413incorporated in any kind of final Commission action. There is a1414wide opportunity for dissenting views in the public comment1415process. I would seek to receive comment from as wide of1416sources as possible, and I would pledge to work with you and1417your colleagues to have a very transparent approach to my1418chairmanship, should I have the honor of being confirmed.1419    Senator Warnock. Do you think Democrats ever get it right?1420    Mr. Quintenz. I look forward to working with them.1421    Senator Warnock. Do Republicans ever get it wrong? Do1422Republicans ever get it right?1423    Mr. Quintenz. No one has a monopoly on the best ideas,1424Senator.1425    [Laughter.]1426    Senator Warnock. Thank you. I think that the erosion of the1427independence of key regulators like the FTC and the NCUA is1428alarming. It is a very serious point I am really trying to make1429as we have this conversation, and I hope, you know, you will1430hear the spirit with which I am trying to make these points1431because our markets are counting on it, our consumers are1432counting on it. These agencies protect us from the worst things1433that could happen. These political purges--because that is what1434we are witnessing. These political purges have weakened the1435regulators and undermined their independence, and I am worried1436that the CFTC will follow suit if the important tradition of a1437bipartisan board goes away.1438    If confirmed, you will have the responsibility, sir, to1439preserve the bipartisan spirit of moderation at the CFTC,1440proactively pulling in minority voices whether or not President1441Trump follows the law. I look forward to holding you1442accountable for that responsibility if you are confirmed. Thank1443you so much.1444    Mr. Quintenz. Thank you.1445    Chairman Boozman. Before I ask my questions, I would like1446to add letters of support from various groups for Mr.1447Quintenz's nomination into the record. Without objection, so1448ordered.1449    [The letters can be found on pages 33-40 in the appendix.]1450    Chairman Boozman. I think you have heard a lot from the1451Committee today in a bipartisan way that we would like to get1452some sort of a bill passed to regulate the digital commodity,1453give regulatory authority to the CFTC. As Congress deliberates1454on granting the CFTC spot digital commodity regulatory1455authority, what key considerations should Congress weigh? Why1456do you believe the CFTC is the right regulator for spot digital1457commodity trading?1458    Mr. Quintenz. Thank you, Mr. Chairman. I think the1459wonderful and the scary thing about this technology is that it1460is software and it can be anything, which also means that it1461can evolve. It has new ways of being governed. Under certain1462kinds of, you know, programming and features and governance,1463the description that I hear from the founder of our fund that1464echoes with me is that it is a--and I will modify this a little1465bit--it is a globally accessible computer that can make1466transparent commitments. That is a very powerful thing, which1467also means that, you know, as crypto assets and blockchain1468technology evolves and becomes decentralized and allows1469networks to form and that governance process to be released1470outside of the control of an individual person or an entity or1471a business and be distributed in a transparent way, that poses1472new and interesting questions from a regulatory perspective,1473given that networks never just exist. They have to start1474somewhere, they have to grow, they do have to evolve. We cannot1475take action that would preclude that from happening, but we1476also have to be careful when that is happening that customers1477are protected.1478    I think that gets to the point that I was trying to make1479previously about taking an action by Congress that can be very1480pro-innovation and pro-customer protection at the same point. I1481do believe that if Congress decides to give authority to the1482CFTC to regulate spot digital commodity markets exclusively,1483with clarity, I think the CFTC is more than up for that mandate1484and that mission. We have, I think, some of the smartest people1485in all of government at the agency with some of the best1486technology in all of government, and as I said, anywhere on the1487planet. We have 10 years of history in the crypto asset1488environment from starting with enforcement cases, but then1489wonderfully moving to innovation with the listing of the first1490regulated Bitcoin futures contract in the world. The insight1491that that gave the agency over the spot market through its1492derivatives market mandate, I think, is an extraordinary thing.1493    Chairman Boozman. Twenty-five years ago, Congress1494recognized that self-certification strikes the right balance of1495allowing the Commission to prohibit contracts that violate the1496law while also fostering liquid and efficient markets and1497allowing for market innovation. Can you talk about the1498importance of self-certification?1499    Mr. Quintenz. Thank you, Senator. I believe it was a1500critical feature of the Commodity Futures Modernization Act of15012000. I think, if--you know, theoretically, if you put yourself1502in the shoes of a regulator, and I have been there, there is1503not a lot of incentive to improve new products. The--you bear1504all the downside risk, and you get none of the benefit of the1505success, so it is natural to focus on all the risks. At the,1506you know, extreme, the precautionary principle approach where1507you have to prove that nothing bad could ever happen before you1508allow something to happen means it will never happen. That is1509proved out in the data.1510    You know, in the 70 years before self-certification1511existed, futures contracts--when the CFTC had to approve new1512futures contracts, futures exchanges listed about 700 products1513in total. In the 20 years since self-certification came online1514through the Commodity Futures Modernization Act, 16,000 new1515contracts have been listed by exchanges. None of them caused1516the financial crisis. Many of them were delisted because they1517did not develop liquidity, but some of them became critical1518risk management, liquidity, price discovery, markets. That is1519what I think the benefit is of the self-certification1520framework.1521    Chairman Boozman. Very good. Have you got any other things?1522    Senator Klobuchar. Yes, just one more. I mentioned on the1523retail customer participation. Well, you are well aware because1524you were at the CFTC, that derivative markets have historically1525been used primarily by large, sophisticated entities, but1526recently, we have seen increased participation by smaller1527retail customers, especially the events contracts and digital1528asset derivative markets. What, if anything, do you think the1529CFTC should do in response to the increasing retail1530participation? Do you think that the agency needs to do more to1531address risks in this area?1532    Mr. Quintenz. Thank you, Senator. I think it depends on1533whether or not there is direct access or whether or not there1534is intermediation. There are a lot of--there are strong1535customer protections across both models. All contracts traded1536by exchanges have to abide by the 23 core principles, including1537things like fair and orderly markets, surveillance, not readily1538susceptible to manipulation, conflicts of interest, et cetera,1539that provide markets with integrity.1540    There is an extra layer of customer protection when they1541are intermediated by the FCM community that have to do1542disclosures associated with potential loss in education and1543outreach. There are even some exchanges that do go direct to1544market participants that have those same customer protections1545listed in their licenses. Those are certainly models that we1546can look at. I take your point, and I would pledge to have an1547open dialog with you around those issues.1548    Senator Klobuchar. Thank you.1549    Chairman Boozman. One very last final thing, and then we1550will be through with this, but can you talk about the1551importance of principles-based regulation and specifically how1552it helps foster innovation?1553    Mr. Quintenz. Thank you, Mr. Chairman. I mentioned this1554briefly in my written testimony, my opening statement. I am a1555strong believer in the benefit of principles-based regulation1556for a few reasons. The first is that I believe it allows1557responsible innovation and allows the marketplace to evolve, to1558try new things, to be held to a standard of best practices,1559which do continue to evolve on their own. It prevents a one-1560size-fits-all regime that locks in a technology approach or a1561standard approach.1562    In order for it to be done compliantly and responsibly,1563there has to be a strong dialog between the regulator and the1564marketplace to ensure that the regulator understands the1565different approaches that are out there, and I think that that1566is a very valuable exchange of information.1567    We do not need to look any further than how wonderful these1568markets are to understand the importance of principles-based1569regulation. The CFTC oversees the most resilient and the most1570liquid and the most innovative derivative markets in the world,1571and in my belief, it is because of the principles-based1572framework in the CEA.1573    Chairman Boozman. Go ahead.1574    Senator Klobuchar. No, thank you.1575    Chairman Boozman. I thought we had one more final, final.1576    Okay. Well, thank you again, Mr. Quintenz, for appearing1577before the Committee.1578    I want to thank the Members for their participation today1579and, as always, for our staffs for making all of this happen.1580The record will remain open for two business days.1581    With that, the hearing is adjourned.1582    [Whereupon, at 4:34 p.m., the Committee was adjourned.]15831584=======================================================================15851586                            A P P E N D I X15871588                             June 10, 202515891590=======================================================================15911592[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]15931594=======================================================================15951596                   DOCUMENTS SUBMITTED FOR THE RECORD15971598                             June 10, 202515991600=======================================================================16011602[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]16031604=======================================================================16051606                         QUESTIONS AND ANSWERS16071608                             June 10, 202516091610=======================================================================16111612[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]16131614                                 [all]