Commodity Futures Trading (CFTC) Commissioner Caroline Pham has proposed the creation of an “Office of Retail Counsel” to expand the CFTC’s consumer protection mandate.
Pham referred to the bureau as a “voice for the people” in a speech at an event hosted by blockchain project Corda on September 27, suggesting that recent developments in crypto make retail protection more of an issue. urgent, noting:
“Crypto’s downfall, risk management failures and substantial retail losses all bring urgency to the need to balance innovation with retail protection and appropriate regulation.”
Pham has modeled the proposed office after the Securities and Exchange Commission’s (SEC) Office of the Investor Ombudsman, saying it is a “tried and true way” to advance customer protection.
According to Pham, the SEC’s office has four basic functions, which are to give investors a voice in policymaking, help retail investors resolve issues with the SEC or self-regulatory organizations, support advisory committees, a more than studying investor behavior and conducting economic research and analysis. .
Pham highlighted the potential of digital assets and blockchains to change existing markets and highlighted “ten fundamentals for responsible digital asset markets”, noting:
“It may still be early, but there are promising use cases if we can achieve blockchain stability and scalability at layer 1, 2, or whatever is next.”
These fundamentals include initially determining whether something is a security, mitigating systemic risks such as cascading liquidations due to Terra’s collapse, protecting customers and the retail public, ensuring transparency and addressing 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 U.S. lawmakers seeking clarity on crypto regulation.
Related: CFTC Commissioner Kristin Johnson Introduces DCCPA Bill at Market Risk Advisory Meeting
The CFTC has recently come under fire following its “regulation by enforcement” on the Ooki DAO case, with the community comparing it to the regulation by enforcement tactics seen in the SEC’s handling of the ongoing Ripple case.
Pham said those views are his own and not necessarily shared by the CFTC or other commissioners.