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CFTC Commissioner to Define Retail Investors

Since the CFTC is expected to be responsible for spot crypto trading, Commissioner Christy Goldsmith Romero has stated that the agency has to revise its approach to rulemaking for retail investors.

She stated her intention to provide a new retail investor definition. The process would begin with posting a more casual idea on the website of the agency and seeking feedback from the public, she said. Goldsmith Romero sees “more retail investors” entering the markets that were once dominated by institutions.

The regulations will add more constraints and safeguards for small-scale investors. Also, the agency has to treat them accordingly, thanks to the creation of a newly defined category. Goldsmith Romera stated that it has to be ensured that expanded access is provided to retail investors in a safe and affordable manner, which can appear very different than how the institutions or a high net worth individual buys.

Several measures now seeping through Congress would give the CFTC jurisdiction over the spot market or the marketplaces wherein investors trade tokens directly with one another. Moreover, this would make the CFTC the principal regulator for crypto trading.

She also noted that a new retail definition might be applied if the agency evaluates restrictions on the use of leverage by investors, for instance. Goldsmith Romero said that separating “household” investors from professionals by forming a separate retail-investor category may provide them with “more consumer protections, possibly more disclosures, written in a layman’s language.