May 23, 2024
Latest Cryptocurrency News

CFTC Commissioner Highlights Crypto Risks, Urges Regulatory Reevaluation 

Christy Goldsmith Romero, a commissioner with the United States Commodity Futures Trading Commission (CFTC), has provided her perspective on a proposed amendment to the government body’s Risk Management Program about digital assets. 

As per a notice issued on June 1, the CFTC has announced its intention to open a proposed rule change that seeks to amend the risk management requirements applicable to swap dealers and futures, commission merchants. Romero, in a public statement, stated that the proposal could enable the commission to address risks associated with certain crypto investments, citing the failure of Silvergate Bank. 

Romero mentioned, “These technological advancements, with their accompanying risks, necessitate the Commission revisiting our regulatory oversight, including our risk management requirements. Existing Commission rules require that banks’ and brokers’ risk management programs ‘take into account’ risks related to lines of business. That could include, for example, digital asset markets.” 

According to the commissioner, brokers’ potential interest in the crypto derivatives market could “carry additional risks.” She referred to the collapse of crypto exchange FTX, as well as Terra and Celsius, along with areas characterized by “rampant fraud and illicit finance.” 

The CFTC will keep the proposal open for public comment for 60 days after its publication in the Federal Register. Following this period, the commission may introduce a formal rule change, which will then be subject to a vote among its leadership. 

Since assuming office in March 2022, Commissioner Romero has frequently acted as a pro-cryptocurrency voice within the CFTC, emphasizing the importance of oversight to ensure investor protection and public trust. In April, she put forward a proposal to reduce the anonymity of certain tokens to better manage the risks associated with digital assets. 

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