The US CFTC identifies three DeFi platforms that facilitated illicit trading of digital asset derivatives and violated agency rules.
The U.S. Commodities and Futures Trading Commission, has taken enforcement actions against three decentralized finance (DeFi) firms for the alleged illicit trading of digital asset derivatives.
On Thursday, September 7, the CFTC charged three DeFi firms – Opyn Inc., ZeroEx Inc., and Deridex Inc. – with violating agency rules by permitting U.S. customers to unlawfully trade digital asset derivatives without registering on the platform.
Consequently, the CFTC has issued cease-and-desist orders and imposed civil penalties of $250,000, $200,000, and $100,000 against these companies.
On Thursday, the U.S. Commodity Futures Trading Commission, initiated a series of actions to resolve the evolving cryptocurrency market. First, the regulator proposed a time-based pilot program for cryptocurrencies. It also settled the largest Bitcoin forex fraud in the annals of the market.
The U.S. government is increasingly scrutinizing decentralized finance, known in the industry as DeFi. These platforms enable users to trade, borrow, and lend digital assets without intermediaries.
In the past few months, government agencies have also issued regulations, imposed sanctions, and taken enforcement actions to signify heightened oversight and scrutiny of DeFi participants. Director of CFTC enforcement Ian McGinley remarked on the most recent development:
“Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts. They do not.”
CFTC Conquers DeFi Frauds
Recently, the US CFTC won a case against Ooki DAO, a decentralized autonomous organization. The DAO allegedly ran an unlawful trading platform and violated additional agency regulations. In June, a federal magistrate ordered a business to cease operations and pay a fine of over $600,000.
However, not all CFTC members concurred with the agency’s decision on Thursday. Summer Mersinger, a Republican commissioner, stated that the CFTC should prioritize offering explicit rules for Defi over enforcement.
She added, “I am concerned that the commission in these cases is taking another step down the path of bringing enforcement actions when we should be engaging with the public”.
