CFTC Commissioner Christy Goldsmith Romero called On Crypto Regulation Clearly Defining Retail Investors At A Conference In Singapore.
The terms came at a time when retail investors were calling fouls for losing their investments in cryptocurrency companies. From 2020 to 2022, bad things like security deposit pools and fraud will plague the crypto industry to fund mismanagement by corporations.
The Commodity Futures Trading Commission (CFTC) is an independent United States agency charged with protecting the public from fraud and abuse related to the sale of commodities and promoting transparency in the futures and options markets.
Perhaps these events did not create risk, but they did reveal how much they would affect investors. Regulators around the world are calling for laws to protect customers.
CFTC Commissioner’s proposal for phased regulation
Christy called for redefining the retail investor and providing legislation tailored to them. She noted that growing retailer interest in cryptocurrencies correlates with increased market exposure.
She pointed out that the agency has not modeled the CFTC for investors with annual incomes of less than $50,000 and that it needs to be restructured.
I recently proposed that the CFTC redefine retail customers. The CFTC’s current definition of retail is too broad, ranging from ordinary household customers to billionaires and hedge funds.
Christy Goldsmith Romero
A tiered definition would separate high net worth individuals and hedge funds from everyday retail investors. For example, hedge funds always have an added layer of protection from the market, so they have less exposure than individual investors.
When Terra Luna crashed In May, many household investors said they had lost all their savings, with some contemplating suicide. recently, FTX contagion Claiming millions of private investor funds.
Laws to protect investors should be easy to understand and include restrictions on leverage and priority when a company files for bankruptcy.
Christy also mentioned the importance of brokers in finance. Analysts argue that brokers make trades higher, but at least limit investors’ exposure to the market. decentralized finance (DeFi) introduced another dynamic that exposed investors to the market.
Regulation of virtual currency exchanges
Christy also called for greater regulation of cryptocurrency exchanges by the CFTC. These included frequent audits. cyber security Analysis, and at least the soundness of financial reviews.
Cybersecurity has become a significant threat to cryptocurrency exchanges. According to a Chainalysis report, hackers stole more than $3 billion from him from the market. Unlike 2021, the 2022 hacker prefers his DeFi protocol and so far he has drained over $718 million in investment capital.
CEO Sam Bank Fried (SBF) Puts Conflicts of Interest at FTX Center allegedly Poured investor money into sister company Alameda Research. Reports are now emerging that Alameda had a special clout at the company.
Christy noted that despite her calls for reform, the CFTC has been slow to implement safety measures.
While the commissioner was firm on regulating digital assets, he noted the potential that distributed ledgers could bring to the economy. She expected explosive growth in the technology, citing applications in agriculture, food safety, finance, and medicine.
Christie’s remarks echo what Bank of England Deputy Governor John Calif has done earlier. share His mistrust of DeFi. John argued that despite the fact that cryptocurrencies were born in the unregulated space and intended to remain so, they are now being widely applied in the mainstream financial sector. car, but it’s as good as its rules, its programming and its sensors.
An accident in the cryptocurrency industry could have far-reaching consequences for the global financial sector. So you need to approach the situation with speed while recognizing the benefits of technology.
