On Tuesday, as the U.S. Commodity Futures Trading Commission (CFTC) began developing its own virtual asset regulations, Better Markets, a non-profit financial reform organization, argued that the CFTC’s rules would not adequately protect individual investors.
According to a report by CoinTelegraph, Better Markets claimed that the CFTC lacks a suitable framework to oversee individual investor trading in the virtual asset market.
On Monday, the CFTC announced plans to establish a regulatory framework for virtual asset trading platforms offering leveraged trading to individual investors and began soliciting public feedback.
Benjamin Shapiro, director of securities policy at Better Markets, stated that unlike the Securities and Exchange Commission (SEC), the CFTC has no legal mandate to protect investors. The CFTC’s mission is to regulate commodities and derivatives markets, which have historically been dominated by large institutions with minimal individual investor participation.
He added that since the CFTC’s existing regulatory framework lacks investor protection measures found in securities trading, it is not the appropriate agency to regulate individual investors’ virtual asset trading.
Meanwhile, both the CFTC and SEC have expressed their intention to establish regulatory clarity for virtual assets, regardless of the Clarity Act’s status. The Clarity Act, a bill addressing the structure of the U.S. digital asset market, was expected to pass this year but failed to advance in a Senate vote last month.
CFTC Chairman Michael Selig indicated that the agency would pursue regulations using its existing legal authority without new congressional legislation.
The SEC is taking similar steps. Recently, it decided to conditionally exempt exchanges meeting certain criteria from registering as exchanges under securities law for five years when tokenizing and trading stocks listed on U.S. exchanges.