Coinbase CEO Calls Out US Commodities Regulator for Enforcing DeFi Protocols
Brian Armstrong, the CEO of Coinbase, has expressed his disagreement with the U.S. Commodity Futures Trading Commission (CFTC) for issuing warnings against decentralized finance (DeFi) protocols. Last week, the CFTC charged DeFi platforms ZeroEx, Opyn, and Deridex for offering illegal derivatives trading. The regulator imposed monetary penalties and ordered the firms to cease violating the Commodity Exchange Act (CEA) and other CFTC regulations.
However, Armstrong argues that these projects are not financial services businesses and believes that the Commodity Exchange Act does not apply to them. He hopes that the DeFi protocols take these cases to court to establish a precedent, emphasizing that the courts have upheld the rule of law in similar situations. Armstrong suggests that these enforcement actions will only push the industry offshore without achieving any meaningful outcomes.
Dissenting Opinion from CFTC Commissioner
One CFTC commissioner, Summer Mersinger, dissented against the enforcement actions. While she supports the CFTC filing enforcement cases in new areas to protect consumers from fraud and abuse, she believes that taking action against the three DeFi firms is unwarranted in this case. Mersinger states that there is no indication of misappropriated customer funds or victimization by the DeFi protocols targeted by the CFTC.
Hot Take: Upholding Rule of Law in DeFi
The CEO of Coinbase urges DeFi protocols to challenge these enforcement actions in court to establish legal precedents. He emphasizes that courts have shown a willingness to uphold the rule of law. By doing so, it can prevent pushing an important industry offshore and contribute to shaping a clear regulatory framework for decentralized finance.
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