Christy Goldsmith Romero compared the typical crypto investor, who may be of modest means, to the investors the CFTC is used to when she spoke at the FIA meeting in Singapore. The US CFTC commissioner called for a new category to protect small investors from crypto.
Christy Goldsmith Romero, commissioner of the United States Commodity Futures Trading Commission (CFTC), gave a presentation on November 30 at the Futures Industry Association Asia Derivatives Conference in Singapore.
She focused particularly on cryptography and cybersecurity when she talked about “how to harness the best that technology offers, while protecting against emerging threats.”
Goldsmith Romero had two ideas for preventing cryptocurrency risks from reaching markets and consumers. The initial was quite novel. Redefining what constitutes a retail investor is the first step in safeguarding household retail investors, Goldsmith Romero stated. She stated that crypto investors are distinct:
The majority of them were born after 1980, are diverse, and earn less than $50,000.The CFTC is not used to seeing that kind of customer.
Goldsmith Romero argues that as a result, they ought not to be treated similarly.While acknowledging the necessity of maintaining financial inclusion, she added, “We should also not let them be crushed, which will happen without meaningful and targeted customer protections.”
Goldsmith Romero proposed “separating household retail from professional and high net worth individuals” by creating two distinct categories of retail investors. After that, the CFTC would provide consumer protections for each category separately and across that division.
In traditional finance, a broker helps customers decide whether an investment is right for them. She stated that “it is important for regulators to assess risk to customers” in disintermediated transactions. Moreover:
“Today, I am calling for the first time in public for the CFTC to use increased supervision of cryptocurrency exchanges.”We already have the authority to regulate derivatives exchanges.
However, despite her requests “for months,” the CFTC has not implemented that supervision. Goldsmith concurred with the proposal for an Office of Retail Investor Advocate made by CFTC Commissioner Caroline Pham.
In her speech, Goldsmith Romero went off topic to talk about blockchain use cases that had nothing to do with cryptocurrency. She stated, “Distributed ledger technology has the potential to prevent disease, maintain food safety, limit waste, and save time and money for our agricultural industry.”
U.S. President Joe Biden suggested Goldsmith Romero for the CFTC chair in September 2021, and he was sworn in on March 30.She has previously expressed her concerns regarding retail investors, and her proposed household retail investor category has received some industry support.