CFTC Commissioner Urges Regulators to Modernize Investor Protections and Embrace Technological Advances
Summary:
CFTC Commissioner Christy Goldsmith Romero emphasizes the need for regulators to modernize protection measures using technological advancements. Failure to do so could negatively impact American investors. Romero appoints technology experts to the CFTC's Technology Advisory Committee to enhance investor protections and promote responsible AI development. She also recommends incorporating KYC and AML processes into decentralized finance and crypto investments. Furthermore, Romero proposes the creation of a National Financial Fraud Registry to combat financial fraud and protect investors.
The CFTC Commissioner, Christy Goldsmith Romero, has emphasized the need for regulators to update their protection measures using technological advancements. She warned that the failure to do so would have a detrimental effect on American investors, particularly the most vulnerable ones. At the North American Securities Administrators Association’s annual meeting, Romero stressed the importance of regulators having a thorough understanding of technology and its implications for finance and law when making policy decisions on next-generation technology. To strengthen investor protections, Romero appointed technology experts in FinTech, responsible artificial intelligence, cryptocurrency, blockchain, and cybersecurity to the CFTC’s Technology Advisory Committee (TAC).
Romero revealed that the TAC experts are focused on finding ways to incorporate Know Your Customer (KYC) and Anti-money Laundering (AML) processes into decentralized finance and crypto investments. They are also dedicated to promoting responsible artificial intelligence (AI) development. Romero stated that federal regulators are just beginning to explore the potential of AI and that establishing governance in decision-making processes that impact investors and markets is a crucial first step.
In terms of crypto investigations, regulatory efforts have shifted from primarily tracking trade activities to monitoring social media platforms. Romero recommended the use of various tools, such as tracing funds, using the blockchain, employing link analysis, and utilizing social media and data analytic tools, to aid in investigations. Romero highlighted that statements shared on social media platforms can serve as strong evidence of intent and can also be used by regulators to issue warnings about scams and protect investors.
To combat financial fraud, Romero proposed the creation of a National Financial Fraud Registry, which would serve as a centralized record of all crimes and fines related to financial fraud. This registry would help investors conduct background checks to determine if companies are under investigation or have faced fines for fraud. Romero initially proposed the establishment of this registry in December 2019, and it aims to involve both federal and state agencies to achieve a comprehensive national fraud registry.
Romero believes that the National Financial Fraud Registry, once implemented, would be a valuable platform for investors to deter financial fraud. She concluded by expressing her belief that federal and state officials working together can enhance the safety of investors.
In a previous statement, Romero encouraged crypto companies to verify the digital identity of users as a means of reducing anonymity and managing associated risks. She emphasized that it is possible for crypto companies to distance themselves from mixers and anonymity-enhancing technology while still providing financial privacy for customers. Romero urged both exchanges and decentralized finance platforms to prioritize the verification of users' digital identities.
CFTC Commissioner Christy Goldsmith Romero has proposed modernizing protection measures through technological advancements. Failure to do so could harm American investors, particularly the most vulnerable ones. Modernizing protection measures will require a foundational understanding of technology and its implications for finance and law. To bolster investor protections, Romero has appointed technology experts to the CFTC's Technology Advisory Committee (TAC) to focus on FinTech, responsible AI, cryptocurrency, blockchain, and cybersecurity.
Incorporating Know Your Customer (KYC) and Anti-money Laundering (AML) processes into decentralized finance and crypto investments is a key task for the TAC experts. Responsible AI development is another area of focus. Romero believes that AI governance is essential in decision-making processes that impact investors and markets.
Crypto investigations have shifted to monitoring social media platforms, and Romero recommends using tracing tools, blockchain analysis, link analysis, social media monitoring, and data analytics to aid in these investigations. Statements shared on social media can serve as evidence of intent and platforms can be used to issue investor warnings. To combat financial fraud, Romero proposes the creation of a National Financial Fraud Registry, aiming to consolidate crimes and fines related to financial fraud. The registry would enable investors to conduct background checks on companies to identify ongoing investigations or fines related to fraud.
Romero believes that the National Financial Fraud Registry would be a valuable tool in deterring financial fraud. She concludes by emphasizing the importance of collaboration between federal and state officials to enhance investor safety.
Romero has previously urged crypto companies to verify users' digital identities as a means of reducing anonymity and managing risks. She highlights that companies can prioritize financial privacy for customers while distancing themselves from anonymity-enhancing technology. Exchanges and decentralized finance platforms are encouraged to verify users' digital identities.
Published At
9/12/2023 7:39:16 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.