Regulation
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According to the representative of the American regulator CFTC, the so-called ordinary investors need more protection than the rich, so the concept of “retail investor” should be divided into two categories.
According to Commodity Futures Trading Commission (CFTC) member Christy Goldsmith Romero, the current definition of a retail investor is too broad and covers people from very different categories – from middle-income investors to millionaires and entire hedge funds.
Therefore, Romero proposed introducing two categories of retail investors so that regulators can better protect people by better understanding the specifics of each category. According to the official, assets and investment offers that are safe for a millionaire may not be safe for ordinary people who want to enter the market without losing all their funds.
The CFTC representative stressed that she does not want to completely block the access of such investors to the markets, but there should be a public consultation on what additional protections should be provided. For starters, Romero says, there should be leverage limits and easier market information for this category of investors.
The Commission should step up oversight of cryptocurrency exchanges, Romero says. The commissioner believes that it was the inaction of the CFTC that led to the default of the FTX crypto exchange – despite many requests, the commission did not introduce enhanced supervision of the company.
Earlier, another CFTC commissioner, Kristin Johnson, called for tougher rules for the crypto industry as soon as possible.
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