CFTC Commissioner Christy Goldsmith Romero recommended regulators modernize its protection measures using technological advances as she warned that failure to do so would have a negative impact on American investors.
Romero, speaking at the North American Securities Administrators Association’s annual meeting in San Diego, California, said that the government’s inability to keep pace with technology would affect the most vulnerable investors. She added:
“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.”
Spearheading this effort to amp up investor protections and guardrails, Romero appointed technology experts in FinTech, responsible artificial intelligence, cryptocurrency, blockchain, and cybersecurity into the CFTC’s Technology Advisory Committee (TAC).
Thank you @NASAA for a warm welcome. Read here to see my re-proposal for a National Financial Fraud Registry. I proposed this in 2019 as @SIGTARP after conducting hundreds of fraud investigations. https://t.co/mjErLobTmY
The TAC is also tasked with promoting responsible artificial intelligence (AI) development. According to Romero:
“Federal regulators are just getting started when it comes to AI. A good place to start is governance in making important decisions that impact investors and markets.”
Federal crypto investigations have shifted away from primarily backtracking trade activities to monitoring social media platforms such as X (formerly Twitter), Reddit and Facebook. However, Romero recommended the use of tools to aid such investigations:
“Tracing funds, tracing crypto, using the blockchain, using link analysis, using social media, and data analytic tools should all be in a regulators’ tool kit.”
The statements (tweets/posts) one shares on social media platforms “can be strong evidence of intent,” Romero added. The same platforms can be used by regulators to issue warnings about scams and protect investors.
To minimize the damages caused by financial fraud, Romero proposed the formation of the National Financial Fraud Registry — a centralized record of all crimes and fines related to financial fraud. The registry would help investors background check for any ongoing investigations or fines for fraud imposed on the companies. Romero first proposed the creation of this registry in December 2019:
“Once established, each federal agency would register its convictions, sentencings, civil fines and resolved enforcement actions. State and local agencies could join to achieve a true national fraud registry.”
Romero believes that such a one-stop-shop platform could help investors deter financial frauds. On an end note, the CFTC Commissioner stated that together, federal and state officials can improve investors’ safety.
In April, Romero urged crypto companies to verify the digital identity of users, as she believed that reducing anonymity in crypto could ease managing the associated risks. She added:
“It is possible for all crypto companies to distance themselves from mixers and anonymity-enhanced technology, while still appropriately providing financial privacy for customers.”
Romero encouraged the verification of digital identity, urging exchanges as well as decentralized finance (DeFi) platforms to verify the digital identity of users.
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Homelessness minister Rushanara Ali has resigned after reportedly hiking the rent on a property she owns by hundreds of pounds – something described by one of her tenants as “extortion”.
That was just weeks after the previous tenants’ contract ended, The i Paper said.
Four tenants who rented a house in east London from Ms Ali were sent an email last November saying their lease would not be renewed, and which also gave them four months’ notice to leave, the newspaper reported.
The property was then re-listed with a £700 rent increase within weeks, the publication added.
In a letter to the prime minister, Ms Ali said that remaining in her role would be a “distraction from the ambitious work of this government”.
She added: “Further to recent reporting, I wanted to make it clear that at all times I have followed all relevant legal requirements.
“I believe I took my responsibilities and duties seriously, and the facts demonstrate this.”
Laura Jackson, one of Ms Ali’s former tenants, said she and three others collectively paid £3,300 in rent.
Weeks after she and her fellow tenants had left, the self-employed restaurant owner said she saw the house re-listed with a rent of around £4,000.
“It’s an absolute joke,” she said. “Trying to get that much money from renters is extortion.”
Image: Sir Keir Starmer said Ms Ali’s work in government would leave a ‘lasting legacy’. Pic: PA
Ms Ali’s house, rented on a fixed-term contract, was put up for sale while the tenants were living there, and was only relisted as a rental because it had not sold, according to The i Paper.
The government’s Renters’ Rights Bill includes measures to ban landlords who end a tenancy to sell a property from re-listing it for six months.
The Bill, which is nearing its end stages of scrutiny in Parliament, will also abolish fixed-term tenancies and ensure landlords give four months’ notice if they want to sell their property.
Something Sir Keir’s increasingly unpopular government could have done without
Rushanara Ali’s swift and humiliating demise is a classic example of paying the price for the politician’s crime of “Do as I say, not as I do”.
She was Labour’s minister for homelessness, for goodness’ sake, yet she ejected tenants from her near-£1m town house then hiked the rent.
A more egregious case of ministerial double standards it would be difficult to imagine. She had to go and was no doubt told by 10 Downing Street to go quickly.
MP for the East End constituency of Bethnal Green and Stepney, Ms Ali was the very model of a modern Labour minister: a degree in PPE from Oxford University.
In her resignation letter to Sir Keir Starmer, she said she is quitting “with a heavy heart”. Really? She presumably didn’t have a heavy heart when she ejected her four tenants.
She’d previously spoken out against “private renters being exploited” and said the government would “empower people to challenge unreasonable rent increases”.
She was charging her four former tenants £3,300 a month. Yet after they moved out, she charged her new tenants £4,000, a rent increase of more than 20%.
In an area represented by the left-wing firebrand George Galloway from 2005 to 2010, Ms Ali had a majority of under 1,700 at the election last year.
Ominously for Labour, an independent candidate was second and the Greens third. No doubt Jeremy Corbyn’s new party will also stand next time.
In her resignation letter to the PM, Ms Ali said continuing in her ministerial role would be a distraction. Too right.
A distraction Sir Keir and his increasingly unpopular government could have done without.
Responding to her resignation, shadow housing secretary Sir James Cleverly said: “I said that her actions were total hypocrisy and that she should go if the accusations were shown to be true.”
A Liberal Democrat spokesperson said: “Rushanara Ali fundamentally misunderstood her role. Her job was to tackle homelessness, not to increase it.”
Previously, a spokesperson for Ms Ali said the tenants “stayed for the entirety of their fixed term contract, and were informed they could stay beyond the expiration of the fixed term, while the property remained on the market, but this was not taken up, and they decided to leave the property”.
The prime minister thanked Ms Ali for her “diligent work” and for helping to “deliver this government’s ambitious agenda”.
Sir Keir Starmer said her work in putting in measures to repeal the Vagrancy Act would have a “significant impact”.
And he said she had been trying to encourage “more people to engage and participate in our democracy”, something that would leave a “lasting legacy”.