CTFC commissioner proposes office focused on retail crypto investors

CTFC commissioner proposes office focused on retail crypto investors

Caroline Pham, Commodity Futures Trading Commissioner (CFTC), has suggested the creation of an “Office of the Retail Advocate”, which will help expand the CFTC’s consumer protection mandate.

In a speech he gave at an event hosted on Sept. 27 by Corda, Pham described the office as “voice of the people”. This was in reference to recent developments in crypto making retail protection more urgent.

“The cryptocurrency crash, failures in risk management, and large retail losses have highlighted the urgency of the need for regulation and innovation to balance innovation and retail protection.”

Pham has modeled the proposed Office of the Investor Advocate on the Security and Exchange Commission’s Office of the Investor Advocate. He stated that it is a “tried and true way” to protect customers.

According to Pham, the core functions of the SEC office are to give investors a voice in policymaking, help retail investors solve problems with self-regulatory or SEC organizations, support advisory boards, study investor behavior, and conduct economic analysis.

Pham highlighted the potential for digital assets and blockchains in order to transform existing markets, pointing out “ten fundamentals of responsible digital asset markets.”

It is still early but there are promising uses cases if blockchain stability and scalability can be achieved across layers 1, 2, and 3.

These fundamentals include determining whether something is security, mitigating systemic risk such as the cascading Liquidations due to Terra’s collapse, protecting customers, the retail public, ensuring transparency and addressing conflicts.

This proposal is the latest in a broader push by the CFTC for greater authority over crypto markets. It follows calls from the US lawmakers and the community seeking clarity about crypto regulation.

Related: Kristin Johnson, CFTC Commissioner, touts DCCPA bill at market risk advisory meeting

Recent criticisms of the CFTC’s “regulation by Enforcement” approach to Ooki DAO cases have led to many in the community comparing it with the SEC’s regulation-by-enforcement tactics used in Ripple.

Pham stated that these views are hers, and not necessarily those of the CFTC or other commissioners.

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