CFTC Announces Enforcement Actions Against Three DeFi Protocols
The U.S. Commodity Futures Trading Commission (CFTC) has announced new enforcement actions against three decentralized finance (DeFi) protocols for allegedly failing to register various derivatives trading offerings. Opyn, Inc. and ZeroEx, Inc., both Delaware companies based in California, and Deridex, Inc., a Delaware company based in North Carolina, were charged with failing to register as swap execution facilities (SEFs) or designated contract markets (DCMs) and failing to take necessary compliance measures.
The CFTC accused all three platforms of illegally offering leveraged and margined retail commodity transactions in digital assets. The enforcement actions resulted in civil monetary penalties. Opyn was fined $250,000, ZeroEx was fined $200,000, and Deridex was fined $100,000.
Director of Enforcement Ian McGinley stated that DeFi operators mistakenly believe that unlawful transactions become lawful when facilitated by smart contracts. He emphasized that the Division of Enforcement will aggressively pursue those who operate unregistered platforms that allow U.S. persons to trade digital asset derivatives.
On the same day, CFTC Commissioner Caroline D. Pham called for the launch of a pilot program for crypto regulation. She expressed concern that the U.S. is falling behind in embracing blockchain technology and digital assets, and proposed that the CFTC establish the first-ever U.S. pilot program for digital asset markets.
Pham suggested that a pilot program would provide a safe framework for emerging technologies and market structures under existing laws and regulations. She emphasized the need for the CFTC to proactively take on new challenges and recommended hosting a roundtable to engage stakeholders on the development and design of the program.
Pham concluded by stating that a pilot program would enable the CFTC to explore innovation while maintaining appropriate market protections. She hoped that such a program would uphold the mandate of fostering open, transparent, competitive, and financially sound markets.
