FTX CEO Sam Bankman-Fried would be amenable to competency tests before retail traders could engage in high-stakes trading. That’s according to his response to a similar suggestion by Christy Goldsmith Romero, commissioner of the U.S. Commodities Future Trading Commission. It would appear that for them, scrolling to the bottom of a thousand-word disclaimer and clicking the “I Totally Understand” button is not a strong indicator that the user totally understands anything.
Their concern is understandable. Derivatives trading mixed with cartoonishly multiplied leverages is not like a game of three-card monte at the street corner. It’s not even like a game of 21 at the high roller table, where you generally can only play with money that you actually own. People can quickly dig themselves into exitless caverns if they don’t grasp the concept of margins.
What can one say? People will be people. Some will vote for a candidate based on how many lawn signs they saw on the drive to the polling station. Others will snort jello powder because TikTok said so. Don’t act like you don’t remember when virtuous e-warriors were pouring ice water on themselves to cure a disease via the mystical power of awareness.
Just two weeks ago, the Securities and Exchange Commission fined Kim Kardashian USD $1.26M for failing to disclose that she was being paid to shill EthereumMax coins on an Instagram post. The SEC understood, advertisement or not, the inevitability of FOMO-crazed lemmings charging a trendy cliffside. A proper disclosure of the partnership, they reasoned, might mitigate lemming losses.
It’s a perilous, envy-fueled world, and almost everything clogging our bandwidth is snake oil. Stay on guard and we’ll see you in November.