US CFTC Commissioner Proposing the Establishment of Fraud Database to Identify Bad Actors

US CFTC Commissioner proposes fraud database to identify bad actors.

Author: Ruholamin Haqshanas, Cryptonews; Translation: Song Xue, LianGuai

Christy Goldsmith Romero, commissioner of the Commodity Futures Trading Commission (CFTC), has proposed the creation of a federal fraud database to enable investors to identify individuals with a poor reputation.

According to Reuters, this initiative aims to provide investors and law enforcement agencies with easy access to information on past financial fraud convictions and civil fines.

It will be a centralized and searchable database of financial misconduct, allowing the public to guard against fraudulent activities.

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Goldsmith Romero emphasizes the need for such comprehensive records so that individuals can easily check before entrusting their funds, trusts, and business to others.

A national fraud database will benefit the public and regulatory agencies

While some regulatory agencies maintain databases of disciplinary actions or consumer complaints, there is currently no national database that can effectively cross-reference between federal agencies and state regulatory bodies.

“It’s really heartbreaking when you talk to victims,” she said in a speech in San Diego on Monday.

“This is about giving people access to information to arm themselves because it’s difficult for victims in fraud cases to get their money back. So, if we can prevent this from happening in the first place, that’s even better.”

This proposal not only facilitates public access to information but also enables the government to identify repeat offenders and act as a deterrent to potential fraudsters.

Goldsmith Romero originally proposed the registration system when overseeing a crucial financial crisis bailout plan in 2009.

Since joining the CFTC as a commissioner in March 2022, she has revived this idea, emphasizing its relevance to the cryptocurrency industry.

Goldsmith Romero mentions the prevalence of fraud in the cryptocurrency space

In an interview with Reuters, Goldsmith Romero also mentioned the prevalence of fraud in the cryptocurrency field and the dispersion of available information.

“This is something I’ve been thinking about again recently regarding cryptocurrencies,” she said.

“We know there is a lot of fraud in the cryptocurrency space, but the information people are trying to access is too much and scattered.”

However, Goldsmith Romero admits that establishing such a database faces challenges.

Identifying a single entity to host the system and ensuring the necessary initial funding will be significant obstacles.

Nevertheless, her proposal aims to address the chaotic information environment and promote investor protection in an era where fraud remains a significant issue.

Due to the ongoing problem of cryptocurrency hacking attacks in the digital asset space, there is a need for a fraud database to be established.

According to a report from Immunefi, a Web3 bug bounty platform, Web3 platforms have lost over $1.2 billion due to hacker attacks and rug pulls so far this year.

The report shows that there have been a total of 211 events causing this massive loss, with losses reaching $23.4 million in just the month of August.

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