Unitedย States Regulator Takes Action Against DeFi Corporations for Illegal Trading
The Unitedย States Commodities and Futures Trading Commission (CFTC) has recently cracked down on 3 decentralizedย financeย (DeFi) corporations for allegedly engaging in illegal trading of digital asset derivatives. The corporations named by the CFTC are Opyn Inc., ZeroEx Inc., and Deridex Inc. According to the CFTC, these corporations violated agency regulations by allowing Unitedย States customers to trade digital asset derivatives without registering on their platforms. As a result, the CFTC has announced a cease and desist order to each firm and imposed civil penalties of $250,000, $200,000, and $100,000 respectively.
Unitedย States Governmentโs Increasing Scrutiny of DeFi
The Unitedย States Government is intensifying its examination of decentralizedย financeย (DeFi) platforms. These platforms enable users to trade, borrow, and lend digital assets without intermediaries. Government agencies have recently introduced regulations and enforcement actions to demonstrate increased oversight of DeFi participants. CFTC enforcement director Ian McGinley highlighted that DeFi operators wrongly believe that smart contracts can make unlawful transactions lawful.
CFTCโs Success Against DeFi Fraud
Recently, the CFTC achieved a victory against a decentralized autonomous organization wasย known Ooki DAO, which was operating an illegal trading platform and violating agency regulations. A federal judge ordered the DAO to shut down and pay a penalty of over $600,000. Nonetheless, not all members of the CFTC support the agencyโs decision. Republican Commissioner Summer Mersinger impliesย that the CFTC should focus on providing clear regulations for DeFi instead of relying solely on enforcement actions.
Hot Take
The Unitedย States CFTCโs crackdown on DeFi corporations signals the governmentโs increasing efforts to regulate the evolving cryptocurrency space. This enforcement action serves as a reminder that operating within the boundaries of the law is critical in the digital asset industry. Both DeFi operators and regulators need to work towards establishing clear regulations and engaging with the public to encourage transparency and compliance.
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