Under Acting Chairman Pham’s leadership, the CFTC has taken a dramatic turn towards regulating crypto. This new innovation-friendly approach is being hailed as a huge victory for innovation. If you scratch the surface, you’ll find it’s a terrible deal for everyday Americans. These are the folks pushing to create a financial environment where they don’t get taken advantage of. That’s equivalent to giving a loaded gun to a 3-year-old and telling them to go have fun.

Here’s why this supposed pro-innovation step is an egregious breach of public trust and an innovation-killing boondoggle.

Willful Ignorance Is Now A Defense

The core of this disastrous shift? The CFTC will only pursue regulatory violations if there's proof the defendant knew about the rules and willfully broke them. Let that sink in. So, the burden of proof is almost nonexistent. This creates convenient buffer for anyone that might be criticized, allowing someone to plead ignorance even if that ignorance was willful.

This reality is similar to a drunk driver claiming that they cannot be prosecuted. They could argue they didn’t know they had consumed enough alcohol to be too impaired to drive. Absurd, right? That’s exactly the precedent the CFTC is currently trying to establish for the wild west of crypto.

Think about the implications. Now, scam artists and shady project founders have a built-in defense. "I didn't know I needed to register!" "I had no idea that manipulating the market was illegal!" That’s a free pass for incompetence, negligence and downright malice.

We’re not talking about giving a few bad actors a pass here. It’s not so much about the fact that these programs are in place.

Trump's Shadow Looms Large

Hardly surprising, when you consider that they’ve been repeatedly directed to enforce Trump’s executive orders on digital asset enforcement. This isn’t simply a policy flip-flop, it’s a political play, and you, the unsuspecting crypto user, are the sacrificial lamb.

The DOJ’s digital asset enforcement policy couldn’t be more timely with this change. This alignment is clearly outlined in the Deputy Attorney General’s March 2019 memorandum. It’s a coordinated effort to ease up on regulation, and while some might cheer for "less government interference," remember who this really benefits: those with the resources to exploit loopholes and navigate the system.

This is not releasing the energy of innovation, this is creating a playpen for the politically connected. It seems like we’re returning to the Wild West era. The only legal authority that counts is the one you can impose with your own firepower or in this instance, your own attorneys.

"Self-Reporting" Is A Joke

The CFTC is increasingly prioritizing self-reporting and cooperation. Seriously? You expect the same people who might be running Ponzi schemes or manipulating markets to suddenly come clean because the CFTC asked nicely?

This is like asking a bank robber to politely return the stolen money and promising not to be too mad. It’s stupid at worst, and reckless at best.

The focus on resolving the noncompliance backlog only if it doesn't involve customer harm or market abuse is equally concerning. So, if someone is playing fast and loose with the rules without actively injuring anyone (so far), they get to go scot free? That’s like saying a building inspector only cares if the building actually collapses, not if it's built with shoddy materials. It's a disaster waiting to happen.

Unfortunately, the reality is that self-reporting is only effective when there is a credible threat of real enforcement. Without explicit punitive consequences, it’s nothing but a public relations stunt.

You can help ensure that the CFTC and the status quo don’t have the last word on this. This shouldn’t just be a crypto thing, this should be across the board fairness, accountability, putting the little guy from getting screwed over.

The crypto space has the potential to be revolutionary, but only if it's built on a foundation of trust and transparency. The CFTC’s approach is creating an environment in which only the rich and the connected will succeed. It's time to fight back. Your financial future depends on it. Don't let them steal it from you. Don't be silent.

  • Contact your representatives. Tell them you're concerned about this shift and demand greater oversight.
  • Support consumer protection organizations that are fighting for stronger crypto regulations.
  • Share this article. Let others know what's happening and encourage them to take action.

The crypto space has the potential to be revolutionary, but only if it's built on a foundation of trust and transparency. The CFTC's current course is paving the way for a system where only the wealthy and well-connected can thrive. It's time to fight back. Your financial future depends on it. Don't let them steal it from you. Don't be silent.