CFTC Commissioner plans to modernize investor protection with technology

CFTC Commissioner Christy Goldsmith Romero recommended regulators modernize its extortion measures utilizing technological advances arsenic she warned that nonaccomplishment to bash truthful would person a antagonistic interaction connected American investors.

Romero, speaking astatine the North American Securities Administrators Association’s yearly gathering successful San Diego, California, said that the government’s inability to support gait with exertion would impact the astir susceptible investors. She added:

“As regulators are making argumentation decisions connected next-generation technology, it is captious that we person a foundational knowing of the technology, and its implications for concern and law.”

Spearheading this effort to amp up capitalist protections and guardrails, Romero appointed exertion experts successful FinTech, liable artificial intelligence, cryptocurrency, blockchain, and cybersecurity into the CFTC’s Technology Advisory Committee (TAC).

Thank you @NASAA for a lukewarm welcome. Read present to spot my re-proposal for a National Financial Fraud Registry. I projected this successful 2019 arsenic @SIGTARP aft conducting hundreds of fraud investigations. https://t.co/mjErLobTmY

— Commissioner Christy Goldsmith Romero (@CFTCcgr) September 12, 2023

The CFTC Commissioner revealed that the TAC experts are tasked with identifying ways to instill Know Your Customer (KYC) and Anti-money Laundering (AML) processes into decentralized concern and crypto concern avenues.

The TAC is besides tasked with promoting liable artificial quality (AI) development. According to Romero:

“Federal regulators are conscionable getting started erstwhile it comes to AI. A bully spot to commencement is governance successful making important decisions that interaction investors and markets.”

Federal crypto investigations person shifted distant from chiefly backtracking commercialized activities to monitoring societal media platforms specified arsenic X (formerly Twitter), Reddit and Facebook. However, Romero recommended the usage of tools to assistance specified investigations:

“Tracing funds, tracing crypto, utilizing the blockchain, utilizing nexus analysis, utilizing societal media, and information analytic tools should each beryllium successful a regulators’ instrumentality kit.”

The statements (tweets/posts) 1 shares connected societal media platforms “can beryllium beardown grounds of intent,” Romero added. The aforesaid platforms tin beryllium utilized by regulators to contented warnings astir scams and support investors.

To minimize the damages caused by fiscal fraud, Romero projected the enactment of the National Financial Fraud Registry — a centralized grounds of each crimes and fines related to fiscal fraud. The registry would assistance investors inheritance cheque for immoderate ongoing investigations oregon fines for fraud imposed connected the companies. Romero archetypal projected the instauration of this registry successful December 2019:

“Once established, each national bureau would registry its convictions, sentencings, civilian fines and resolved enforcement actions. State and section agencies could articulation to execute a existent nationalist fraud registry.”

Romero believes that specified a one-stop-shop level could assistance investors deter fiscal frauds. On an extremity note, the CFTC Commissioner stated that together, national and authorities officials tin amended investors’ safety.

Related: CFTC commissioner calls for crypto regulatory aviator program

In April, Romero urged crypto companies to verify the integer individuality of users, arsenic she believed that reducing anonymity successful crypto could easiness managing the associated risks. She added:

“It is imaginable for each crypto companies to region themselves from mixers and anonymity-enhanced technology, portion inactive appropriately providing fiscal privateness for customers.”

Romero encouraged the verification of integer identity, urging exchanges arsenic good arsenic decentralized concern (DeFi) platforms to verify the integer individuality of users.

Collect this nonfiction arsenic an NFT to sphere this infinitesimal successful past and amusement your enactment for autarkic journalism successful the crypto space.

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