Better Markets Calls CFTC 'Wrong Agency' for Retail Crypto Oversight

Better Markets, a nonprofit financial reform advocacy group, has criticized the Commodity Futures Trading Commission's (CFTC) push to regulate certain retail crypto transactions, arguing that the derivatives regulator is ill-equipped to protect everyday investors. The CFTC on Monday opened a public comment period on a potential framework covering margined, leveraged, or financed retail crypto transactions under its existing statutory authority. Benjamin Schiffrin, director of securities policy at Better Markets, said the CFTC's lack of an investor protection mandate makes it the wrong fit for retail crypto oversight.

"Unlike the SEC, the CFTC lacks an investor protection mandate. Its mission is to regulate the commodity and derivatives markets, which historically have been dominated by large institutions with very little retail investor participation," Schiffrin said. He added that the CFTC's rules lack the securities-law protections that apply under SEC regulation, making retail crypto customers more vulnerable. The criticism comes as both the CFTC and SEC advance crypto policy under existing law, following the stalled CLARITY Act in Congress.

Better Markets also challenged the CFTC's legal basis for the proposed framework, noting that the cited statutory authority was originally enacted to combat fraud in leveraged precious-metals trading — not to establish the agency as a primary regulator for retail crypto. Schiffrin further warned that the framework could permit affiliations between market participants similar to those that contributed to the collapse of FTX. He also took aim at CFTC Chair Mike Selig's ambition to make the US the "crypto capital of the world." "Crypto — after 18 years of effort and innumerable disproved and baseless claims — still lacks any real-world use case," Schiffrin said, contrasting that goal with aspirations the US actively avoids in other industries.