Caroline Pham took the reference of the recent Terra ecosystem collapse and suggested considering crypto assets as lottery tokens.
Commodity Futures Trading Commission (CFTC) is the Commodities regulatory body of the US, which regulates the derivatives crypto market as a leading regulatory body. In the last few months, the CFTC agency started to work with the Securities and Exchange Commission (SEC) to bring the best possible regulatory framework on crypto, where there exists confusion about the nature of crypto assets as security or not.
Recently Caroline Pham, Commissioner at CFTC, appeared in an interview with CNBC. Through the interview, Caroline shared her point of view by taking the reference to the recent downfall in the Terra Crypto project, which resulted in a crash in the value of two tokens Luna & UST to zero.
According to Caroline, people should consider crypto assets as lottery tokens, which can give huge profits or losses for the buyers.
“If people started to think about some of these novel crypto tokens as frankly, lottery tickets. When you go and you buy a lottery ticket, you might strike it big, and get rich quick, but you might not.”
CFTC commissioner noted that the recent case of Terra collapse was a type of tragedy, which was a clear hint about the possibilities of risks associated with cryptocurrencies.
CFTC official also said that already regulation work is on the path on stablecoins by the US Securities regulatory body but here regulatory bodies needed to update their existing traditional laws to bring better regulation to the crypto market.
“It’s always faster to stand up a regulatory framework when it’s already existing. You’re just talking about extending the regulatory perimeter around newer, novel products,”
Caroline also emphasized the need to work on huge regulation framework updates on stable coins, including algorithmic stablecoin, to figure out the possible category to put it under the derivatives assets class.
The statements by the CFTC official are a clear hint that Stabelcoins or related crypto assets & related companies will go under highly strict laws to ensure the safety of the investors.