Better Markets says CFTC is ‘wrong agency’ to regulate retail crypto
Better Markets said the CFTC’s proposed framework to bring certain cryptocurrency transactions and exchanges under its oversight will leave investors less protected than under the SEC.
Better Markets claims the CFTC’s proposed framework for regulating certain cryptocurrency transactions and exchanges is insufficient and would offer weaker protections for retail investors compared to the SEC. The nonprofit financial reform advocacy group argues that the Commodity Futures Trading Commission, which is considering rules for margined, leveraged or financed retail crypto transactions under its existing authority, is ill-equipped to oversee the market due to its mission focused on commodity and derivatives markets dominated by large institutions with limited retail involvement.
Better Markets' director of securities policy, Benjamin Schiffrin, contends that the CFTC lacks an investor protection mandate and that its rules, lacking the protections of SEC-regulated securities, make it the wrong agency to oversee retail crypto transactions. Schiffrin also disputes the CFTC's claim that Congress intended it to regulate these specific crypto transactions, pointing out that the agency's statutory authority was originally designed to address fraud in leveraged precious-metals trading.
He further criticizes the proposed framework for potentially allowing affiliations between market participants, which Schiffrin believes contributed to the collapse of the FTX exchange.
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