Project 2025 Financial Agencies Plan: Digital Asset Deregulation, SRO Capture, and CFPB Defunding
Project 2025 proposes to strip SEC oversight of most digital assets, weaken self-regulatory organization (SRO) accountability, and dismantle the CFPB — actions that would shield crypto and fintech firms from meaningful enforcement, expose investors to fraud, and eliminate the primary consumer protection agency for financial products.
Project 2025's financial regulatory agenda is a blueprint for deregulating the most volatile and opaque corners of finance while crippling the agencies that protect consumers. On digital assets, the plan directs the SEC and CFTC to define most coins and tokens as 'commodities' — exempting them from SEC registration, disclosure, and anti-fraud rules unless they pay dividends or liquidation rights. This would effectively gut the SEC's ability to police crypto exchanges, stablecoins, and decentralized finance platforms where retail investors have lost billions to fraud and manipulation. The plan's demands on self-regulatory organizations are superficially pro-transparency — open board meetings, public agendas, and written arbitration findings — but the ultimate threat is to merge FINRA into the SEC as a last resort if reforms aren't enacted. That consolidation could reduce investor recourse by creating a more centralized, less-checked regime for securities arbitration. Meanwhile, the attack on the CFPB — recycling unsubstantiated claims that its Civil Penalty Fund 'diverts' money to leftist nonprofits — prepares the ground for defunding the Bureau, rolling back its oversight of junk fees, predatory lending, and data abuses, a playbook of regulatory capture that has historically enabled crises.
The humanitarian alternative
Congress should reject the fragmentation of securities and commodities regulation. Instead, it should fund a dedicated Digital Asset Oversight Unit within the SEC with $50 million and 200 FTEs, staffed by examiners and litigators with subpoena power. For the CFPB, the Civil Penalty Fund should be retained and protected by statute from diversion, but Congress should amend Dodd-Frank to require the fund's distributions be publicly reported with a complete beneficiary list to dispel the 'slush fund' accusation. The structural goal is clear: put the cops on the beat, not defund them and then blame the resulting crime wave on the cops.
Original source — excerpted
project2025 Project 2025 ch. 30: Federal Trade Commission (pp 868-870)"— 835 — Financial Regulatory Agencies DIGITAL ASSETS Both the SEC and the CFTC have been irresponsible actors in the digital asset area. They have had more than a decade to promulgate rules governing digital assets, yet the SEC has utterly failed to do so, and the CFTC has provided only minimal guidance. Instead, both agencies have chosen regulation by enforce - ment—and have done it poorly. They neither adequately protect investors nor provide responsible market participants with the regulatory environment that they need to thrive. The SEC and CFTC should clarify the treatment of digital assets (coins or tokens). Specifically, they should: l Promulgate a joint regulation providing that a holder of digital assets may not be deemed a party to an investment contract or an investor in a common enterprise unless, while the enterprise is a going concern, the holder is entitled to a share of the earnings or profits of the common enterprise or a defined flow of payments from the common enterprise in consideration of the investment or unless, upon liquidation, the holder has rights against the assets of the common enterprise. Otherwise, the digital asset shall be deemed a c…"