US CFTC commissioner calls for new category to protect small investors from crypto
United States Commodity Futures Trading Commission (CFTC) commissioner Christy Goldsmith Romero spoke at the Futures Industry Association Asia Derivatives Conference in Singapore on Nov. 30. She talked about “how to harness the best that technology offers, while protecting against emerging threats,” with particular emphasis on cybersecurity and crypto.
Goldsmith Romero had two proposals for protecting consumers and markets from the risks presented by cryptocurrency. The first was rather novel. “Protecting household retail investors starts with redefining who is a retail investor,” Goldsmith Romero said. Crypto investors are different, she said:
Thus, they should not be treated the same, Goldsmith Romero reasons. “we also should not let them be crushed, which will happen without meaningful and targeted customer protections,” she said, while acknowledging the need to maintain financial inclusivity.
Goldsmith Romero suggested creating two categories of retail investor “separating household retail from professional and high net worth individuals.” After that the CFTC would provide consumer protections across that division and for each categories individually.
In traditional finance, a broker plays a role in determining the appropriateness of an investment for a consumer. In disintermediated transactions, “it is important for regulators to assess risk to customers,” she said. Moreover:
The CFTC has not heeded her calls “for months” to implement that supervision, however. Goldsmith endorsed CFTC Commissioner Caroline Pham’s call for an Office of Retail Investor Advocate.
Goldsmith Romero digressed in her speech to discuss blockchain use cases unrelated to cryptocurrency. “Distributed ledger technology has the potential to prevent
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