Better Markets Challenges CFTC’s Retail Crypto Trading Framework

The nonprofit group Better Markets has criticized the CFTC's proposed framework for retail crypto trading, arguing it offers weaker investor protections than the SEC. The CFTC opened a public comment period on its framework for retail crypto trading involving margin, leverage, or financing. Benjamin Schiffrin, Better Markets’ Head of Securities Policy, claimed the CFTC lacks a statutory mandate to protect investors, unlike the SEC. He argued the CFTC’s mission is to regulate commodity and derivatives markets, not retail crypto trading.

Better Markets also challenged the CFTC’s claim that Congress intended for it to regulate such activities. Schiffrin noted the statutory authority cited by the CFTC was originally for fraud in leveraged precious metals trading, not for overseeing retail crypto. He further criticized the proposed framework for potentially allowing relationships between market participants that contributed to the collapse of FTX.

Schiffrin condemned CFTC Chair Mike Selig’s remarks about making the U.S. the global crypto capital, saying he failed to explain the benefits. He also pointed out that crypto still lacks legitimate use cases after 18 years. In response, Nate Geraci, President of NovaDius Wealth Management, argued the crypto industry seeks clear rules, and if Congress fails to provide them, the CFTC and SEC may have to step in.