CFTC Commissioner Compared Crypto Crash to 2008 Banking Crisis

Christy Goldsmith Romero, Commodity Futures Trading Commission commissioner (CFTC), urged Congress to close cryptocurrency regulatory gaps in an interview with Axios. She spoke out in response to the recent plunge which has drained more than $400 billion from the crypto market in just days. She said that the unregulated sector is similar to some parts of 2008’s financial sector.

Crypto Today is similar to 2008’s Banking Sector

Christy Romero, CFTC Commissioner, outlined two major risks to cryptospace due to turmoil in the market. She compared the industry’s rapid growth to 2008’s banking sector and compared it with the current situation.

First, she pointed out that they both have a “pretty large market that isn’t regulated.”

“We will regulate derivatives and crypto commodities such as bitcoin and Ether. But, we don’t regulate cash or spot markets. Although we have the anti-fraud authority, it is very limited. Although we have taken enforcement actions, we are unable to really examine the market.

Second, the markets are strongly correlated with other equity markets. This is evident in bitcoin’s rise/fall with the tech-rich Nasdaq index. She acknowledged that cryptocurrencies weren’t designed for this purpose in the beginning but she considered the correlation to be an incentive for institutional investors as well as retail investors, to invest in such an asset.

“In a downmarket, you’re going to see risk exposed…My greatest concern is that regulations fail to keep up with technology and the most vulnerable people will be hurt.”

Romero responded to a question about whether regulations could hinder the development of cryptocurrency technology. She said that oversight is crucial for crypto firms looking to expand and scale their customer base to attract more investors. She suggested that Congress clarify the regulatory framework for the growing asset class to facilitate its growth.

She said that the difference between crypto today and the 2000s economy is that institutional investors are not yet investing in digital assets because they are worried about the lack of regulation.

On Lummis’ Bill

Romero stated that she would prefer to see Congress give her agency a greater degree of authority than anti-fraud authority.

Romero has worked experience at both the SEC (and the CFTC). She was the counsel for Christopher Cox, Chairman of the SEC. Mary Schapiro, before joining the CFTC. Both authorities are positioned for protecting customers. The notable difference is that the CFTC allows more products to trade on its regulated crypto-exchanges.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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