A commissioner at the Commodity Futures Trading Commission (CFTC) disagrees with the agency’s decision to file enforcement actions against three decentralized finance (DeFi) companies.
The CFTC announced this last week charged 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.
“Every respondent engaged in these activities related to blockchain-based software protocols and smart contracts, commonly referred to as DeFi, which functioned similarly to trading platforms and claimed to offer users the ability to transact in a decentralized environment.
In her dissenting statement, CFTC Commissioner Summer Mersinger said says she is not opposed to the CFTC filing enforcement cases in new areas, especially those aimed at protecting consumers from fraud and abuse, but that the action against the three DeFi companies is unwarranted.
“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.”
Mersinger says the CFTC’s order against the three DeFi protocols characterizes a hostile attitude toward DeFi.
“We are being asked to establish liability and impose sanctions based on a new technology that was decentralized in conception and operation – an area that has not previously been the subject of a CFTC enforcement action.”
The commissioner also says enforcement is “inherently a poor fit” with the regulator’s goal of protecting consumers while promoting responsible innovation.
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Featured image: Shutterstock/Vit-Mar/Natalia Siiatovskaia