US CFTC Commissioner Calls for New Category to Protect Small Crypto Investors
Speaking at the FIA meeting in Singapore, Christy Goldsmith Romero compared the typical crypto investor, who can have modest means, with the investors that the CFTC is used to.
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Christy Goldsmith Romero, Commissioner of the US Commodity Futures Trading Commission (CFTC), spoke at the Futures Industry Association Asia Derivatives Conference in Singapore on November 30. ”, with a particular focus on cybersecurity and cryptography.
Goldsmith Romero had two proposals to protect consumers and markets from the risks presented by cryptocurrency. The first was rather new. “Retail investor household protection starts with redefining who a retail investor is,” Goldsmith Romero said. Crypto investors are different, she said:
"Most are young people born after 1980, diverse and earning less than $50,000 a year. Not the typical client the CFTC is used to seeing."
So they shouldn't be treated the same, says Goldsmith Romero. “Nor must we allow them to be crushed, which will happen without meaningful and targeted customer protections,” she said, while acknowledging the need to maintain financial inclusiveness.
Goldsmith Romero has suggested creating two categories of retail investors "separating household retail from professionals and high net worth individuals." After that, the CFTC would provide consumer protections in that division and for each category individually.
In traditional finance, a broker plays a role in determining the suitability of an investment for a consumer. In disintermediated transactions, "it's important for regulators to assess the risk to customers," she said. Additionally:
“Today I publicly call for the first time for the CFTC to invoke enhanced oversight of crypto exchanges. […] This is well within our existing authority for derivatives exchanges.
The CFTC has ignored its calls "for months" to implement this oversight, however. Goldsmith has endorsed CFTC Commissioner Caroline Pham's call for a retail investor advocacy office.
Goldsmith Romero digressed in his keynote to discuss blockchain use cases unrelated to cryptocurrency. "Distributed ledger technology has the potential to prevent disease, ...
Speaking at the FIA meeting in Singapore, Christy Goldsmith Romero compared the typical crypto investor, who can have modest means, with the investors that the CFTC is used to.
New
Christy Goldsmith Romero, Commissioner of the US Commodity Futures Trading Commission (CFTC), spoke at the Futures Industry Association Asia Derivatives Conference in Singapore on November 30. ”, with a particular focus on cybersecurity and cryptography.
Goldsmith Romero had two proposals to protect consumers and markets from the risks presented by cryptocurrency. The first was rather new. “Retail investor household protection starts with redefining who a retail investor is,” Goldsmith Romero said. Crypto investors are different, she said:
"Most are young people born after 1980, diverse and earning less than $50,000 a year. Not the typical client the CFTC is used to seeing."
So they shouldn't be treated the same, says Goldsmith Romero. “Nor must we allow them to be crushed, which will happen without meaningful and targeted customer protections,” she said, while acknowledging the need to maintain financial inclusiveness.
Goldsmith Romero has suggested creating two categories of retail investors "separating household retail from professionals and high net worth individuals." After that, the CFTC would provide consumer protections in that division and for each category individually.
In traditional finance, a broker plays a role in determining the suitability of an investment for a consumer. In disintermediated transactions, "it's important for regulators to assess the risk to customers," she said. Additionally:
“Today I publicly call for the first time for the CFTC to invoke enhanced oversight of crypto exchanges. […] This is well within our existing authority for derivatives exchanges.
The CFTC has ignored its calls "for months" to implement this oversight, however. Goldsmith has endorsed CFTC Commissioner Caroline Pham's call for a retail investor advocacy office.
Goldsmith Romero digressed in his keynote to discuss blockchain use cases unrelated to cryptocurrency. "Distributed ledger technology has the potential to prevent disease, ...
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