CFTC Commissioner Supports Strong Regulatory Framework for Digital Assets

CFTC Commissioner Kristin N. Johnson called for a strong regulatory regime for digital assets that provides strong retail investor protections.

In remarks at the CFTC and Office of Minority and Women Inclusion Roundtable on Digital Assets and Financial Inclusion, Ms. Johnson said that retail participants make up a larger percentage of investors in digital asset futures than any other commodity-based futures contract market. She said that retail participants include members of historically underserved communities like low-income families, families with limited disposable income and seniors living on a fixed income. She warned that these communities are at greater risk when investing in the digital asset market.

Ms. Johnson commented on two of the proposed bills before Congress to regulate digital assets - the Digital Commodities Consumer Protection Act of 2022 and the Responsible Financial Innovation Act. She said that both would give the CFTC primary regulatory authority over digital assets. She added that while Congress may provide the framework to allow regulators oversight of digital asset markets, regulators will still need to work to protect investors through regulation, enforcement and educational outreach.

She emphasized that market participants have expressed heightened concerns regarding cybersecurity attacks on digital asset platforms. She said that due to a lack of regulation and protections, digital asset platforms are especially susceptible to cyberattacks. She added that "[i]t is vital for the U.S. to bolster its role as a leader in the global financial system by developing a strong regulatory framework for digital assets[.]"