The Commodity Futures Trading Commission (CFTC) announced that it initiated and successfully settled legal actions against the Opyn, ZeroEx, and Deridex platforms. The three decentralized finance protocols allegedly failed to register various derivatives trading offerings.
According to the official press release, Deridex and Opyn face allegations of not registering as a swap execution facility (SEF) or designated contract market (DCM), failure to register as a futures commission merchant (FCM), and negligence. to implement a customer identification program in accordance with the Bank Secrecy Act compliance program, which is required for FCMs.
CFTC Issues Warning Against DeFi Protocols
The three platforms are also accused of illegally offering leveraged and margined retail commodity transactions in digital assets. Opyn, ZeroEx, and Deridex were ordered to pay civil monetary penalties of $250,000, $200,000, and $100,000, respectively, and to cease and desist from violating the Commodity Exchange Act and CFTC regulations.
In a statement, Ian McGinley, Director of the CFTC’s Division of Enforcement, said,
“Somewhere along the way, DeFi operators got the idea that illegal transactions would be legal if facilitated by smart contracts. They weren’t. The DeFi space might be new, complex, and evolving, but the Division of Enforcement will continue its progress and aggressively pursue operating unregistered platforms that allow US persons to trade digital asset derivatives.
Voice of Dissent
While the CFTC has confirmed that all companies are cooperating with the investigation, thus getting a reduced financial penalty as a result, the community members far from satisfaction. Some have CONSIDERED the latest incident as an attack on the DeFi ecosystem.
Aside from the crypto industry, CFTC commissioner Summer Mersinger also opposed the enforcement vote and expressed concerns about the agency’s actions in the cases. Mersinger cited that there is no evidence to suggest that customer funds have been misused or that any market participants have been harmed by the DeFi protocols targeted by the CFTC with its enforcement actions.
“I am concerned that the Commission in these cases is taking a step down the road of bringing enforcement actions when we need to engage with the public. It is important to emphasize that “Enforcement First” is not always the CFTC’s default position.”
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