Better Markets Fires at the CFTC’s Retail Crypto Push

Better Markets, the nonprofit financial reform advocacy group, has called the Commodity Futures Trading Commission (CFTC) the wrong agency to oversee retail cryptocurrency transactions. The group argues that a proposed framework for margined and leveraged crypto trading would leave investors with weaker protections than they receive under the Securities and Exchange Commission (SEC).The CFTC on October 5 sought public comment on a potential framework that would bring certain retail crypto transactions and qualifying exchanges under its existing authority. Benjamin Schiffrin, director of securities policy at Better Markets, argued the agency's mission centers on commodity and derivatives markets historically dominated by large institutions, not retail participants.

Why Better Markets Says the CFTC Falls Short

Schiffrin's core objection is structural, and the CFTC operates without the investor protection mandate that governs the SEC, he wrote in the group's comment letter. The SEC's framework imposes disclosure requirements, suitability standards, and other safeguards designed specifically for retail investors.However, the CFTC's rules were built around institutional participants who can absorb losses and assess risk independently.Schiffrin also challenged the statutory authority cited by the CFTC, noting that it was originally enacted to address fraud in leveraged precious-metals trading and does not show congressional intent for the agency to become a primary regulator of retail crypto. He further criticized the framework for potentially allowing affiliations between market participants that Better Markets said contributed to the collapse of FTX. The criticism comes after the CLARITY Act stalled in Congress, leaving both the CFTC and SEC to act under existing law rather than waiting for new legislation.

Schiffrin Takes Aim at the Crypto Capital Ambition

Schiffrin also pushed back on statements by CFTC Chair Mike Selig about making the United States the crypto capital of the world, questioning why that would be a desirable outcome."Crypto, after 18 years of effort and innumerable disproved and baseless claims, still lacks any real-world use case. It is used either purely for speculation or for criminal purposes," Schiffrin wrote in his comment, according to Cointelegraph.Nate Geraci, president of NovaDius Wealth Management, pushed back on X, arguing that the crypto industry is seeking clear rules and that if Congress cannot provide them, the CFTC and SEC may have to act in the interim. The exchange underscores a wider disagreement over whether regulatory action without new legislation helps or harms the market.

Both Regulators Are Moving Without a New Law

The CFTC's framework is not the only regulatory move in play. The SEC on October 1 proposed easing some custody rules for investment advisers and separately allowed limited tokenized US stock trading under a temporary exemption, while issuing new guidance on how securities laws apply to digital assets.The parallel actions suggest both agencies are prepared to carve out jurisdiction over different parts of the crypto market rather than wait for Congress to settle the boundary between them, a dynamic that leaves industry participants navigating two rule sets simultaneously.

What Traders Should Watch

The CFTC's public comment period will shape whether the proposed framework advances or is revised. With the CLARITY Act stalled and both regulators writing new rules under existing authority, the next inflection point may be the 2026 midterm elections, which could reset congressional appetite for comprehensive crypto legislation.