In an interview with Bloomberg, Caroline Pham, the CFTC commissioner, recently urged international regulators to offer more precise guidelines on digital assets in 2023. Pham stated that there are continuous discussions concerning global industry standards for crypto regulation with international companies. He also added that there are several discussions abroad currently.
Pham claims to have met with more than 75 stakeholders to address issues related to crypto legislation. The CFTC commissioner emphasized that quite advanced discussions regarding the kinds of standards that could be used internationally were taking place outside the United States.
Bloomberg asked Pham about recent developments in the cryptocurrency business. They are bringing up Genesis and Gemini. Pham said that regulators must consider their options to use existing authority to offer clarity.
This refers to designating a cryptocurrency financial instrument and holding it to the same criteria as conventional financial instruments. Pham says it is also essential to find frameworks that apply to blockchain technology and non-financial crypto activities.
In addition to urging for universal norms in crypto regulation, she noted that in 2023, she hoped for more direction from American regulators. She said she’d like to see more direct from the CFTC and other authorities this year. Pham also hopes that there may be more clarity in the United States.
CFTC Commissioner Suggests Setting up an Office for Small-Scale Crypto Investors
To broaden the CFTC’s responsibility for consumer protection, Caroline Pham of the Commodity Futures Trading Commission (CFTC) has proposed the establishment of an “Office of the Retail Advocate.”
Pham suggested that recent developments in cryptocurrency made retail protection a more urgent concern in a speech delivered at an event sponsored by blockchain project Corda, noting:
The cryptocurrency meltdown, risk management mistakes, and significant retail losses highlight the need to balance innovation, protection, and appropriate regulation.
Pham modeled the new agency after the Office of the Investor Advocate of the Security and Exchange Commission (SEC). She claims it is a tried-and-true mechanism to promote customer safety.
According to Pham, the SEC’s Office has four primary responsibilities. To give investors a voice in policy making. The office should also help retail investors settle issues with the SEC or self-regulatory organizations. To support advisory committees and to research investor behavior and undertake economic analyses.
Pham outlined 10 fundamentals for ethical digital asset markets. Pham highlighted the potential of digital assets and blockchains to transform current markets.
There are potential use cases to accomplish blockchain stability and scalability over layers 1, 2, or whatever comes next, albeit it may still be early.
The initial determination of whether something is a security, reducing systemic risks like the cascading liquidations brought on by Terra’s failure, safeguarding clients and the retail public, guaranteeing transparency, and dealing with conflicts of interest are some of these foundations.
The proposal is the CFTC’s most recent effort in an extensive campaign is its control over the cryptocurrency markets. It comes in response to requests for clarification on cryptocurrency regulation from the public and US politicians.
Legal Issues Facing Gemini and Genesis Might Further Shake up the Sector
Due to the recent spate of insolvencies, investor trust is at an all-time low. The Winklevoss twins of Gemini, a cryptocurrency exchange, and Barry Silbert, CEO of Digital Currency Group (DCG), the company that owns cryptocurrency market maker and lender Genesis, are involved in this case.
Cameron Winklevoss sent an open letter to Barry Silbert. She pointed out that 47 days have passed since Genesis ceased withdrawals. Cameron gave a direct, ostensibly critical appraisal of DCG’s current business procedures.
“Over the past six weeks, we have done everything within our power to engage with you in good faith. Cooperatively, to find an amicable agreement for you to repay the $900 million you owe.”
The letter also stated that Genesis received the cash as a loan through Gemini’s Earn program. This enabled users to earn up to 7.4% in annual yield on cryptocurrency. Cameron subsequently sent out another tweet. She asked Silbert to publicly commit to fixing the issue by January 8; at least on Twitter, Silbert appeared to have ignored the call.
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