Coinbase CEO Brian Armstrong Opposes CFTC Action Against DeFi Protocols
Brian Armstrong, the CEO of Coinbase, is strongly against the United States Commodity Futures Trading Commission (CFTC) taking legal action against decentralized finance (DeFi) protocols. He believes that such actions could weaken the industry in the country. Armstrong encourages DeFi protocols to fight these cases in court instead of settling, as he argues that the claims lack merit.
Brian Armstrong: CFTC Action May Hamper US Economy
In a statement on September 13, Armstrong expressed doubt about the CFTC’s ability to take action against DeFi protocols. He stated that these protocols are not financial service businesses and that it’s unlikely the Commodity Exchange Act even applies to them. Armstrong hopes that DeFi protocols will take these cases to court to establish a precedent, as he believes that courts have shown a willingness to uphold the rule of law.
The CFTC recently issued orders and settlements against three prominent DeFi firms: Opyn, ZeroEx, and Deridex. Deridex and Opyn were charged with failing to register as a swap execution facility or designated contract market and failing to implement a customer identification program required by the Bank Secrecy Act. ZeroEx was charged with offering illegal leveraged retail commodity transactions in digital assets.
Concerns Arise About the Expense of Battling US Regulators
Armstrong raises concerns that increased enforcement efforts could lead the DeFi industry to relocate offshore. While many of his followers support his stance, some doubt whether smaller projects have the funds to fight regulators and end up settling instead. One user suggests setting up a legal defense fund for small projects.
The cost of legal battles against US regulators has become a prominent topic in the crypto industry. Ripple’s CEO, Brad Garlinghouse, revealed that their legal dispute with the SEC has cost over $200 million in legal fees. Ripple recently scored a partial victory when a court ruled that its native token, XRP, is not considered a security for retail sales. However, the SEC has filed an appeal, which could result in increased legal fees for Ripple.
Hot Take: Brian Armstrong Stands Up for DeFi
Brian Armstrong, the CEO of Coinbase, is taking a strong stance against the US Commodity Futures Trading Commission (CFTC) and its actions against decentralized finance (DeFi) protocols. He believes that these protocols should not settle and instead fight these cases in court to set a precedent. Armstrong argues that DeFi protocols are not financial service businesses and questions whether the Commodity Exchange Act even applies to them. He raises concerns about the potential damage to the US economy if the CFTC continues its enforcement efforts against DeFi. While some doubt the feasibility of battling regulators, Armstrong’s supporters agree with his stance. The cost of legal battles against US regulators has become a significant issue in the crypto industry, with companies like Ripple spending millions on legal fees.
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