The commissioner warns that the crypto markets have weaknesses comparable to those found during the global financial crisis, and she requests that the agency be granted more power to combat these threats.
Speaking at the ISDA Crypto Forum on October 26th, Romero noted that the danger presented by cryptocurrencies to the general financial stability rises as the number of connections between crypto markets and TradFi grows.
The kind of systemic risk that would come with increased size or links with the existing financial system is not yet present in the digital asset market, which is still very minor.
The commissioner would want to keep cryptocurrency out of pension and retirement accounts, one area of TradFi. This viewpoint was likely informed by recent events in the United Kingdom when problems with pension funds necessitated action on the part of the Bank of England.
Romero warns the U.S. not to hurry laws, but she does advocate for a “same risk, same regulatory result” approach as the dangers presented by the crypto business grow:
To paraphrase from the CFTC’s own report: “Congress may address financial stability threats by extending greater jurisdiction to the CFTC, just as it did after the crisis.”
The defaults on these “subprime” mortgages were packaged with other loans and marketed to investors as a “safe” investment.
It seems the CFTC is trying to modify its image as the more crypto-friendly authority relative to the U.S. SEC by disclosing it initiated 18 enforcement actions on the sector during the 2022 calendar year as part of its push to obtain greater regulatory supervision.
Also Read: SushiSwap Votes For A Restructuring Proposal
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
Comments are closed.