Wednesday, February 28, 2024

CFTC Eyes on DeFi Platforms in Latest US Crypto Crackdown.

The US Commodity Futures Trading Commission initiated legal actions against three decentralised finance companies and hinted that additional actions against similar firms could follow.

According to the CFTC, the companies Opyn Inc., ZeroEx Inc., and Deridex Inc. illegally let US consumers trade digital-asset derivatives without registering, in violation of the agency’s guidelines. The agency imposed civil penalties of $250,000, $200,000, and $100,000 on the companies and ordered them to stop breaking CFTC rules.

As part of their settlement agreements, none of the three businesses admitted or refuted the regulator’s accusations. In a statement, Will Warren, the co-founder and CEO of ZeroEx, also known as 0x, stated that following “constructive dialogue” with the CFTC, the business has added procedures to better safeguard users. We advance in our efforts to increase web3 acceptance, and we never stop developing, he declared.

Requests for comment from the other two companies’ representatives went unanswered.

Decentralised finance, or DeFi as it is known in the industry, is a topic that the US government is focusing on more and more. Users can trade, borrow, and lend digital assets directly through the platforms rather than going through a middleman. To warn DeFi actors, governments have issued regulations, imposed penalties, and brought enforcement proceedings during the past few months.

CFTC enforcement director Ian McGinley said in a statement that “somewhere along the line, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts.” “No, they don’t.

The CFTC recently announced a victory over Ooki DAO, a decentralised autonomous organisation that it accused of operating an illegal trading platform and breaking other CFTC regulations. In June, a federal judge mandated that the company close its doors and pay a fine of more than $600,000.

Not every CFTC member agreed with the organisation’s decision on Thursday. Republican commissioner Summer Mersinger dissented, arguing that the regulator should put more emphasis on establishing clear regulations for DeFi than on enforcing them, particularly when dealing with platforms that haven’t engaged in fraud or damaged their users.

When we should be interacting with the public, she added, “I am concerned that the commission in these cases is taking another step down the path of bringing enforcement actions.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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