1 year ago
Coinbase CEO Brian Armstrong urged the U.S. Commodity Futures Trading Commission (CFTC) against “creating enforcement actions against decentralized (DeFi) protocols” due to the fact that “it’s highly improbable the Commodity Exchange Act” applies to them, according to a Sept. 14 post connected X (formerly Twitter).
According to Armstrong, these protocols are not “financial work businesses” and should instrumentality these cases to tribunal to “establish precedent.” “The courts person proven to beryllium precise consenting to uphold [the] regularisation of law,” helium added.
CFTC targeting DeFi protocols
Armstong’s connection is coming connected the heels of the caller unregistered derivatives trading charges filed by the CFTC against 3 DeFi protocols, including Opyn, Deridex, and ZeroEx.
In bringing the charges, the regulator’s manager of enforcement, Ian McGinley, said, “DeFi operators got the thought that unlawful transactions go lawful erstwhile facilitated by astute contracts.”
McGinley restated his presumption astir these protocols successful a caller speech astatine the Practising Law Institute, wherever helium said unregulated DeFi exchanges airs an “obvious threat.” In his words:
“The beingness of unregulated DeFi exchanges is an evident menace to the markets regulated and customers protected by the CFTC, and it is 1 we person taken precise seriously.”
Will the CFTC beryllium a worse regulator than the SEC?
The CFTC’s caller attack to the crypto manufacture is akin to actions taken by its sister regulatory agency, the U.S. Securities and Exchange Commission (SEC), which has brought respective enforcement actions against large crypto companies similar Binance and Coinbase.
Market observers person progressively criticized the SEC’s approach, with galore urging lawmakers to manus implicit the emerging industry’s oversight to the CFTC.
However, Delphi Labs wide counsel Gabriel Shapiro warned that the “CFTC would beryllium an adjacent worse regulator for crypto than the SEC.” According to him, the Commission is well-informed astir crypto and DeFi facts, and helium is convinced that the “CFTC views DeFi arsenic amerciable successful the U.S. for commodity derivatives.”
The station Coinbase CEO Brian Armstrong questions CFTC jurisdiction implicit DeFi protocols appeared archetypal connected CryptoSlate.
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