Caroline Phamof the Commodity Futures Trading Commission (CFTC), has proposed the creation of an “Office of the Consumer Advocate”, with the aim of expanding the CFTC’s consumer protection mandate.
Pham referred to the bureau as a “voice for the people” in a speech delivered at an event hosted by the Corda blockchain project on Sept. 27, suggesting that recent developments in the crypto space have made protecting retailers an issue. most urgent matterpointing out:
“The cryptocurrency crash, risk management failures, and substantial retail losses add urgency to the need to balance innovation with retailer protection and proper regulation.”
Pham has modeled the proposed office at the Securities and Exchange Commission’s (SEC) Office of the Investor Advocate.stating that it is a “proven way” to promote client protection.
According to Pham, The Office of the SEC has four basic functions: giving investors a voice in policy making, helping retail investors resolve problems with the SEC or self-regulatory organizations, supporting advisory committees, as well as studying investor behavior. investors and conduct economic research and analysis.
Pham highlighted the potential for digital assets and blockchains to change existing markets, outlining “ten foundations for responsible digital asset markets.”pointing out:
“It may still be early days, but there will be promising use cases if we can achieve blockchain stability and scalability at layer 1, 2 or whatever.”
These fundamentals include the initial determination of whether something is a value; mitigating systemic riskssuch as the cascading liquidations due to the collapse of Terra; the protection of customers and the retail public; the guarantee of transparency; and treatment of conflicts of interest.
The proposal marks the latest effort in a larger push by the CFTC to increase its authority over cryptocurrency markets. and follows calls from the US community and lawmakers seeking clarity on cryptocurrency regulation.
The CFTC has recently come under fire following its “regulation by application” in the Ooki DAO caseto which the community has compared it to the regulation-by-app tactics seen in the SEC’s handling of the ongoing Ripple case.
Pham said these views are his own and are not necessarily shared by the CFTC or other commissioners..
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