Coinbase CEO Urges DeFi Companies to Fight Back Against CFTC Legal Action
Brian Armstrong, the CEO of Coinbase, has called on decentralized finance (DeFi) companies targeted by the Commodity Futures Trading Commission (CFTC) to retaliate with countersuits. The CFTC recently imposed fines on several DeFi protocols, intensifying its enforcement efforts against companies in the sector. Armstrong argues that the CFTC should not be taking legal action against these companies because they are not financial service businesses and the Commodity Exchange Act likely does not apply to them. He encourages DeFi protocols to take their cases to court in order to establish legal precedent, as the courts have shown a willingness to uphold the rule of law.
Three DeFi Firms Fined by CFTC
The CFTC issued three simultaneous orders, filing and settling charges against DeFi firms Opyn, ZeroEx, and Deridex. Opyn and Deridex were charged with improper registration, while all three were charged with illegally offering leveraged and margined retail commodity transactions in digital assets. Opyn was fined $250,000, ZeroEx $200,000, and Deridex $100,000.
Coinbase Highlights Lack of Regulatory Clarity
Armstrong argues that these enforcement actions are only driving the industry offshore. He previously suggested that Coinbase might move its operations outside the US if there is no progress in clarifying the regulatory landscape for cryptocurrencies. As Coinbase itself faces legal action from the Securities and Exchange Commission (SEC), Armstrong understands firsthand the challenges of running a crypto business in an environment lacking regulatory clarity. In a recent blog post, Coinbase highlighted the damage being done to the US through a regulation-by-enforcement strategy.
Hot Take: Coinbase CEO Calls for DeFi Protocols to Challenge CFTC Legal Actions
Brian Armstrong, the CEO of Coinbase, has urged decentralized finance (DeFi) protocols to fight back against the Commodity Futures Trading Commission (CFTC) legal actions. The CFTC recently imposed fines on several DeFi firms, sparking concerns about regulatory overreach. Armstrong believes that these protocols should take their cases to court in order to establish legal precedent. He argues that the CFTC should not be taking action against DeFi companies, as they are not financial service businesses and may not fall under the Commodity Exchange Act. By challenging these actions, DeFi protocols can potentially shape the regulatory landscape for the industry.
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