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.
United States Commodity Futures Trading Commission Commissioner Christy Goldsmith Romero recommended regulators modernize their 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:
Spearheading this effort to amp up investor protections and guardrails, Romero appointed technology experts in fintech, responsible artificial intelligence, cryptocurrency, blockchain and cybersecurity to 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 CFTC commissioner revealed that the TAC experts are tasked with identifying ways to instill Know Your Customer (KYC) and Anti-Money Laundering (AML) processes into decentralized finance and crypto investment avenues.
The TAC is also tasked with promoting responsible artificial intelligence (AI) development. According to Romero:
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:
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 do background checks for any ongoing investigations or fines for fraud imposed on the companies. Romero first proposed the creation of this registry in December 2019:
Romero believes that such a one-stop-shop platform could help investors deter financial fraud. 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:
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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