Better Markets, a nonprofit focused on financial reform, has voiced strong opposition to the Commodity Futures Trading Commission’s effort to establish rules for certain retail cryptocurrency transactions. The group contends that placing these activities under CFTC authority could leave individual investors with fewer safeguards than those available under Securities and Exchange Commission oversight.

On Monday, the CFTC sought public comment on a proposed framework covering retail crypto trades that involve margin, leverage or financing. The initiative relies on the agency’s existing legal powers and also contemplates creating a new federal category for qualifying crypto trading platforms that would fall under direct CFTC supervision.

Concerns Over Investor Protections

Benjamin Schiffrin, director of securities policy at Better Markets, stated that the CFTC’s core mission centers on commodity and derivatives markets historically dominated by large institutions. He argued this makes the agency poorly suited to oversee retail-facing activity.

Schiffrin added that CFTC rules do not carry the same standards that apply when investors trade securities regulated by the SEC. As a result, he said the CFTC is the wrong agency to regulate retail customer transactions involving crypto assets.

Better Markets also questioned whether Congress intended the CFTC to take primary responsibility for retail crypto. The statutory authority cited by the agency was originally enacted to combat fraud in leveraged precious metals trading, according to the group. Schiffrin maintained this history does not support using the provision as a foundation for broad retail crypto regulation.

The organization further warned that elements of the proposed framework could allow affiliations among market participants of the kind previously linked to the collapse of the FTX exchange.

Debate Over Crypto Policy Goals

Schiffrin also challenged recent comments by CFTC Chair Mike Selig about positioning the United States as a global crypto hub. He questioned the value of that objective and described crypto as still lacking demonstrated real-world applications after nearly two decades.

Nate Geraci, president of NovaDius Wealth Management, offered a contrasting view. He said the crypto industry is primarily seeking clear regulatory guidelines. If Congress cannot deliver them, Geraci argued, the CFTC and SEC may need to establish workable boundaries under their current authorities.

Agencies Advance Without New Legislation

The CFTC’s request for comment arrives after the CLARITY Act failed to advance in Congress. Both the CFTC and the SEC have signaled they will continue developing crypto policy using existing legal tools rather than waiting for new statutes.

In parallel, the SEC has taken several steps of its own. On Thursday it proposed easing certain custody requirements for investment advisers, allowed limited trading of tokenized U.S. stocks, and issued updated guidance on the application of securities laws to crypto assets.

The CFTC’s comment period will shape the next phase of its framework, including how investor protections and platform affiliations are addressed. Market participants are watching how the two agencies’ approaches interact, particularly for retail users engaged in leveraged or financed crypto activity.