The CFTC has acted against DeFi platforms Opyn, ZeroEx, and Deridex, levying fines due to regulatory breaches.
The US Commodity Futures Trading Commission (CFTC) has taken significant regulatory steps against three decentralized finance (DeFi) firms for their alleged failure to register various derivatives trading offerings.
In a statement dated 8th September, the CFTC disclosed that it had issued orders against Opyn, ZeroEx, and Deridex.
Specifically, Deridex and Opyn faced charges for failing to register as a swap execution facility or designated contract market, as well as failing to register as a futures commission merchant.
Furthermore, the CFTC found that both protocols failed to comply with customer provisions outlined in the Bank Secrecy Act.
All three firms also faced charges for the illegal offering of leveraged and margined retail commodity transactions involving digital assets. Consequently, the CFTC’s orders mandated Opyn, ZeroEx, and Deridex to pay penalties of $250,000, $200,000, and $100,000, respectively.
In addition to the penalties, the CFTC ordered them to cease and desist from violating the Commodity Exchange Act and the CFTC’s regulations. These firms have consented to resolve the charges brought against them.
Ian McGinley, the CFTC’s director of enforcement, stressed the significance of DeFi platforms adhering to legal boundaries, remarking, “DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts… they do not.”
He also highlighted that the Division of Enforcement will continue to adapt and vigorously pursue those operating unregistered platforms.
Nonetheless, not everyone is satisfied with the CFTC’s actions. Ryan Sean Adams, co-host of Bankless, criticized the CFTC’s enforcement actions, while considering them another attack on the DeFi sector.
Opyn, one of the targeted DeFi platforms, operates as an investment strategy platform. It had approximately $23 million in total volume locked (TVL) on its protocol at the time of the CFTC’s actions. ZeroEx, conversely, functions as an Ethereum [ETH]-based decentralized exchange.
Deridex, the third platform subject to the CFTC’s actions, was an Algorand [ALGO]-powered derivatives platform. However, the project unexpectedly ceased operations in February, resulting in a decrease in its TVL from about $150,000 to $133 as of 8th September, according to data from DefiLlama.
The U.S. Commodity Futures Trading Commission (CFTC), established in 1974, is a regulatory body responsible for overseeing the derivatives and futures markets in the United States. Its primary mission is to protect market participants, prevent fraud, and ensure market integrity. The CFTC enforces regulations related to trading, reporting, and clearing of derivatives contracts. It plays a crucial role in maintaining transparency and fairness in the commodities and derivatives markets.
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