Coinbase CEO Brian Armstrong says the US Commodity Futures Trading Commission (CFTC) should not be issuing warnings against decentralized finance (DeFi) protocols.
Last week, the CFTC announced that it is charging the DeFi protocols ZeroEx, Opyn and Deridex for offering illegal derivatives trading.
The regulator said it also ordered the three companies to pay fines and stop violating the Commodity Exchange Act (CEA) and other CFTC regulations.
Armstrong, however argues that these projects are not financial service providers and says that “it is highly unlikely that the Commodity Exchange Act would even apply to them.”
“My hope is that these DeFi protocols will take these cases to court to set a precedent. The courts have proven to be very willing to uphold the rule of law. All this achieves is pushing an important industry abroad.”
One CFTC commissioner, Summer Mersinger, disagreed with the enforcement actions. Mersinger said she is not opposed to the CFTC filing enforcement cases in new areas, especially those aimed at protecting consumers from fraud and abuse, but she argued that the action against the three DeFi companies in this case is not justified .
“The Commission’s orders in these cases provide no indication that client funds have been misappropriated or that market participants have been victimized by the DeFi protocols on which the Commission has exercised its enforcement powers.”
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