Better Markets Claims CFTC Is Unsuitable for Regulating Retail Crypto Trading

Odaily Planet Daily News – The nonprofit financial reform advocacy organization Better Markets stated that the Commodity Futures Trading Commission (CFTC)'s proposal to regulate certain cryptocurrency transactions and exchanges may provide retail investors with weaker protections compared to those under the Securities and Exchange Commission (SEC). The CFTC has sought public comments on a framework for margin, leverage, or financing of retail crypto trading. Benjamin Schiffrin, Better Markets' Director of Securities Policy, pointed out that the CFTC lacks investor protection responsibilities, as its statutory authority was originally intended to address fraud in leveraged precious metals trading, which does not justify it as the primary regulator for retail crypto trading. He also noted that the proposed framework might allow the formation of relationships among market participants that were previously considered to have contributed to the collapse of FTX. Following the CLARITY Act's blockage in Congress, the CFTC and SEC continue to advance crypto policies under existing laws. The CFTC plans to establish a new federal category to directly regulate eligible crypto trading platforms, while the SEC has proposed relaxing certain custody rules for investment advisors, allowing limited tokenized U.S. stock trading, and issuing new guidance on the application of securities laws to crypto assets. (Cointelegraph)