CFTC Outlines Financial Crime Registry Proposal to Help Investors

In response to the growing threat of financial crime, Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero has proposed the creation of a national fraud registry.

This initiative seeks to modernize investor protection by leveraging technology to combat fraud and ensure the responsible use of artificial intelligence (AI). 

Goldsmith Romero believes that regulators can use technological advances to their advantage, particularly in enforcement: 

“As regulators are making policy decisions on next-generation technology, it is critical that we have a foundational understanding of the technology, and its implications for finance and law.”

Romero’s proposal comes on the heels of comments by fellow CFTC Commissioner Caroline Pham. Pham is an advocate for regulatory guardrails to protect investors. Pham’s experience as a sponsor of the CFTC’s Global Markets Advisory Committee has informed her perspective on the need for a compliant digital asset market. 

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

The proposed national fraud registry would serve as a one-stop shop. Investors could check if companies or individuals they are considering investing with have been convicted or fined for fraud.

This centralized record of all crimes and financial fraud could be a significant deterrent to potential fraudsters. It could also act as an efficient tool for law enforcement.

Chart showing CFTC imposed $624M in financial crime penalties for violations relating to cryptoassets since 2009. Source: Elliptic

CFTC Squares Up Against AI

Romero’s proposal also addresses the role of AI in the financial sector. She promotes responsible AI that aligns with stakeholders’ interests, is transparent, explainable, auditable by humans, uses unbiased data, and minimizes potential harm. 

The proposed measures reflect the CFTC’s commitment to keeping pace with technological advancements and using them to protect investors. By harnessing the power of technology, federal and state officials can build a safer financial system.

Read more: How Will Artificial Intelligence (AI) Transform Crypto?

Romero’s stance aligns with Pham’s call for tighter controls on innovation, particularly in the cryptocurrency market. Pham believes in fostering economic growth in a responsible way. She has repeatedly called for the CFTC to adopt a tougher stance on crypto. 

The proposed national fraud registry and the call for responsible use of AI reflect the CFTC’s commitment to protecting investors and maintaining financial stability. It signals that regulators might be ready to evolve with technology instead of just standing in the way.


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