CFTC Commissioner Urges Action on Cybersecurity and Cryptocurrencies

CFTC Commissioner Christy Goldsmith Romero recommended steps the United States should take, in conjunction with other national governments, to respond to cybersecurity threats to the financial system.

In remarks at the FIA Asia Derivatives Conference, Ms. Goldsmith Romero warned that cyber threats have become more frequent, increasingly complex and have the potential to create or leverage a serious disruption to markets and critical infrastructure. She warned that "the rapid digitization of financial services during the pandemic has led to an increase in global cyber threats related to third-party service providers." She also warned that ransomware attacks are on the rise and encouraged sharing information among firms to improve resiliency.

Ms. Goldsmith Romero argued that recent events in the cryptocurrency industry, like the collapse of FTX, revealed systemic risks not typically found in traditional financial markets. She proposed redefining a "retail customer" and categorizing such customers as either household retail investors or professional retail investors, with greater restrictions placed on investments made by each group. She also called for increasing supervision over cryptocurrency exchanges with a heightened focus on cybersecurity threats, conflicts of interest and contagion threats. In light of the FTX collapse, she urged Congress to pass legislation prohibiting the commingling of customer and company assets.