CTFC Commissioner Proposes Office Focused on Crypto Retail Investors

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 mandate.

Pham called the office the “voice of the people” in a speech given at an event hosted by the Corda blockchain project on September 27, suggesting that recent events in crypto are making retail protection a more pressing issue, noting:

“The crypto crash, risk management failures and substantial retail losses make the need to balance innovation with retail protection and proper regulation urgent.”

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

The SEC office has four main functions according to Pham, which are to give investors a say in policy-making, to help retail investors resolve issues with the SEC or self-regulatory organizations, supporting advisory boards, as well as studying investor behavior and conducting economic research and analysis. .

Pham highlighted the potential of digital assets and blockchains to change existing markets by outlining “ten core principles for responsible digital asset markets,” noting:

“It may still be early days, but there are some promising use cases if we can achieve blockchain stability and scalability at Layers 1, 2 or whatever.”

These fundamentals are to initially determine whether something is a security, to mitigate systemic risks such as cascading liquidations due to the collapse of Terra, to protect customers and the retail public, to ensure transparency and to resolve conflicts of interest.

The proposal marks the latest effort in a broader push by the CFTC to increase its authority over crypto markets and follows calls from the community and US lawmakers seeking clarity on crypto regulation.

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

The CFTC has recently come under fire over its “regulation by enforcement” in the Ooki DAO case, with the community comparing it to regulation by enforcement tactics seen in the SEC’s handling of the Ripple case. In progress.

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