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CFTC Commissioner Seeks Crypto Regulation after Terra Collapse

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Caroline Pham, the Commissioner of the Commodity Futures Trading Commission (CFTC), recently talked elaborately about the regulator’s plans for cryptocurrency regulations and customer protection.

While talking to two of the major US media platforms, Pham touched on several key crypto-related issues like shadow banking, stablecoins, customer protections, regulation and enforcement.

She revealed that one of the primary questions among regulators and lawmakers is whether to consider stablecoins, including algorithmic stablecoins as derivatives.

“The SEC regulates securities, but for everything that is not a security the  CFTC  probably has some regulatory touchpoint over it. We have the regulation over derivatives based on commodities, but we also have certain areas where we directly regulate spot markets,” said Pham.

Another focus area was shadow banking using cryptocurrencies. It became a key issue after the collapse of the stablecoin project, Terra, which promised a return of up to 20 percent for USD-pegged  stablecoin  deposits.

“I think what I’m worried about is that without appropriate customer protections in place, and the right disclosures, people are buying some of these crypto tokens thinking that they’re guaranteed to strike it rich,” she added.

A Collaborative Effort

Pham, who assumed the top CFTC post in April, thinks that the collapse of Terra has made it crucial for immediate crypto regulations to save public interest. She wants a collaborative approach with the US Congress toward the regulations.

“So, I really welcome the efforts of Congress to provide a clear and holistic regulatory framework over crypto, and to make it very clear and even to expand the CFTC’s jurisdiction in this space, to make sure that there’s that clarity for the industry so that way there can be more growth in compliant digital asset markets with adequate protections for the retail public,” the Commissioner said.

Meanwhile, the regulator continues to bust violators in the cryptocurrency investment space, including the ones in the spot markets. The agency has already made over 50 enforcement actions, imposing $750 million in penalties.

Caroline Pham, the Commissioner of the Commodity Futures Trading Commission (CFTC), recently talked elaborately about the regulator’s plans for cryptocurrency regulations and customer protection.

While talking to two of the major US media platforms, Pham touched on several key crypto-related issues like shadow banking, stablecoins, customer protections, regulation and enforcement.

She revealed that one of the primary questions among regulators and lawmakers is whether to consider stablecoins, including algorithmic stablecoins as derivatives.

“The SEC regulates securities, but for everything that is not a security the  CFTC  probably has some regulatory touchpoint over it. We have the regulation over derivatives based on commodities, but we also have certain areas where we directly regulate spot markets,” said Pham.

Another focus area was shadow banking using cryptocurrencies. It became a key issue after the collapse of the stablecoin project, Terra, which promised a return of up to 20 percent for USD-pegged  stablecoin  deposits.

“I think what I’m worried about is that without appropriate customer protections in place, and the right disclosures, people are buying some of these crypto tokens thinking that they’re guaranteed to strike it rich,” she added.

A Collaborative Effort

Pham, who assumed the top CFTC post in April, thinks that the collapse of Terra has made it crucial for immediate crypto regulations to save public interest. She wants a collaborative approach with the US Congress toward the regulations.

“So, I really welcome the efforts of Congress to provide a clear and holistic regulatory framework over crypto, and to make it very clear and even to expand the CFTC’s jurisdiction in this space, to make sure that there’s that clarity for the industry so that way there can be more growth in compliant digital asset markets with adequate protections for the retail public,” the Commissioner said.

Meanwhile, the regulator continues to bust violators in the cryptocurrency investment space, including the ones in the spot markets. The agency has already made over 50 enforcement actions, imposing $750 million in penalties.

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