On June 14, CFTC Commissioner Christy Goldsmith Romero discussed cryptocurrency regulation, rejecting suggestions that the agency would take a relaxed approach toward regulating cryptocurrency and affirming that the CFTC is positioned to protect consumers if given more authority. Romero said she welcomed efforts to close regulatory gaps through the recent Responsible Financial Innovation Act (RFIA) that was introduced in the Senate earlier this month and another similar bill that will be introduced by Senators Stabenow (D-MI) and Bozeman (R-AR) that would designate the CFTC as crypto’s top regulator. When asked about the possibility of regulation slowing the crypto market, Romero responded that “companies can’t scale up the way they need to without a lot of the financial institutions investments,” and that “regulation is needed.”
Romero noted similarities between the present market and the 2008 market, stating that “we’ve got a pretty sizable market that’s largely unregulated and regulators just have no window into it.” She also noted that her biggest concern is that “if regulation fails to keep pace with technology, the most vulnerable people are going to be hurt.”
Putting It Into Practice: During the interview, Romero called for more regulations maintaining that the crypto sector needs to be managed before it is too late. Romero’s interview comes after the Biden administration issued an Executive Order in March requiring various agencies to produce reports relating to cryptocurrency regulation by September and October (we discussed the Executive Order in a previous blog post here). Whether the current bills in the works will be enacted into law is unclear, however, they are likely to inform the discussion and debate about appropriate crypto regulation into the future.
*Eduardo Gutierrez Linares is a summer associate in the firm’s San Francisco office.