The Commodity Futures Trading Commission (CFTC) official, Christy Goldsmith Romero, said that the crypto market crash bears similarities to the 2008 crisis.
CFTC commissioner Christy Romero discussed the similarities between the crypto industry crash and the 2008 crisis. According to Romero, the rapidly growing crypto industry is very similar to the banking industry in 2008.
Romero drew attention to two main risks in the crypto industry:
Romero first stated that the crypto industry has “a sizable unregulated market.” There is also a regulatory gap, Romero said, adding that there is currently no way to regulate the industry.
“We will regulate derivatives and crypto commodities such as Bitcoin and Ethereum. However, we cannot actually regulate the cash and spot markets. While we have anti-fraud authority, it is extremely limited. We have sanctions, but we can’t really look at this market”
Another risk that Romero pointed out was that Bitcoin moved in line with the technology-focused Nasdaq index. Acknowledging that cryptocurrencies did not aim for such a thing in the first place, he said that this correlation encourages individual investors as well as institutional investors.
“You will find that you are exposed to risk in a falling market. My biggest concern is that if regulations fail to keep up with technology, you, the vulnerable, will suffer.”
Responding to a question about whether regulations will suppress the crypto industry, Romero stated that regulation is necessary for crypto firms.
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