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CTFC commissioner proposes office focused on retail crypto investors

CTFC commissioner proposes office focused on retail crypto investors

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Commodity Futures Trading Commissioner (CFTC) Caroline Pham has proposed the creation of an “Office of the Retail Advocate” to expand the CFTC’s consumer protection powers.

Pham referred to the agency as “the voice of the people” during a Sept. 27 speech at an event hosted by blockchain project Corda, where he suggested that recent crypto events make retail security a more pressing issue.

“The crypto crash, risk management failures and significant retail losses underscore the urgent need to balance innovation with retail protection and appropriate regulation.”

Pham has modeled the proposed office after the Security and Exchange Commission’s (SEC’s) Office of Investor Advocate, saying it is a “proven way” to promote client protection.

According to Pham, the SEC’s office has four core functions, which are to provide investors with a say in decision-making, help retail investors resolve issues with the SEC or self-regulatory organizations, support advisory committees, and investigate investor behavior and conduct research and financial analysis. .

Pham highlighted the potential of digital assets and blockchains to transform existing markets, outlining “ten fundamentals of a responsible digital asset market.”

“It may still be early days, but there are promising use cases if we can achieve blockchain stability and scalability between layer 1, 2, or any subsequent layer.”

These fundamentals include initially determining whether something is a security, mitigating systemic risks such as liquidations from the Terra collapse, protecting customers and the retail public, ensuring transparency, and resolving conflicts of interest.

The proposal marks the latest effort in the CFTC’s broader effort to increase its power over the crypto market, and follows requests from community and US lawmakers to clarify crypto regulation.

Related: CFTC Commissioner Kristin Johnson presents the DCCPA at the Market Risk Advisory Meeting

The CFTC has recently come under fire for its “enforcement regulation” in the Ooki DAO case, with the community comparing it to the regulation with enforcement tactics seen in the Ripple case pending before the SEC.

Pham said those views are his and not necessarily shared by the CFTC or other commissioners.