Better Markets Criticizes CFTC's Retail Crypto Framework

Huo Xing Finance reports that the nonprofit financial reform advocacy group Better Markets has criticized the CFTC’s proposed framework for retail crypto trading, arguing that it offers weaker investor protections than the SEC. On Monday, the CFTC opened a public comment period on its proposed framework governing retail crypto trading involving margin, leverage, or financing. Benjamin Schiffrin, Better Markets’ Head of Securities Policy, stated that unlike the SEC, the CFTC lacks a statutory mandate to protect investors; its mission is to regulate commodity and derivatives markets historically dominated by large institutions with minimal retail participation, making the CFTC the wrong agency to oversee retail crypto trading. Better Markets also challenged the CFTC’s claim that Congress intended for it to regulate such activities. Schiffrin noted that the statutory authority cited by the CFTC was originally established to address fraud in leveraged precious metals trading and does not indicate congressional intent for the agency to become the primary regulator of retail crypto. He further criticized the proposed framework for potentially permitting relationships between market participants—relationships that contributed to the collapse of FTX. Schiffrin also condemned CFTC Chair Mike Selig’s remarks about making the U.S. the global crypto capital, saying he failed to explain why this would be beneficial and pointed out that crypto still lacks legitimate use cases after 18 years. In response, Nate Geraci, President of NovaDius Wealth Management, argued that the crypto industry is simply seeking clear rules, and if Congress fails to provide them, the CFTC and SEC may have no choice but to assume this responsibility.