Regulator Charges Popular DeFi Protocols 0x, Opyn and Deridex With Offering Illegal Digital Asset Derivatives To U.S. Customers
The U.S. Commodity Futures Trading Commission (CFTC) has initiated enforcement actions against three Delaware-based DeFi companies, accusing them of offering illegal digital asset derivatives to U.S. customers.
The derivatives regulator has ordered the firms to cease operations and imposed civil penalties on Opyn, ZeroEx (0x), and Deridex of $250,000, $200,000, and $100,000, respectively.
The companies are charged with offering leveraged and margin commodity transactions without the required licenses. Deridex and Opyn face additional charges for failing to register as either a swap execution facility (SEF) or a designated contract market (DCM), and for not registering as a futures commission merchant (FCM). The firms also allegedly neglected to implement a customer identification process.
While Opyn had attempted to prevent U.S. residents from accessing its services through geo-blocking, the CFTC found these efforts insufficient.
Deridex, however, is alleged to have not taken any steps to restrict U.S. residents from using its platform. ZeroEx’s charges stem from its Matcha DEX aggregator, which allowed U.S. users to trade leveraged crypto tokens. Matcha noted that the tokens in question represent less than 0.1% of its total trading volume since launch.
CFTC Director of Enforcement, Ian McGinley, underscored that smart contract transactions are not exempt from existing laws, warning that the CFTC will “aggressively pursue” unregistered platforms that facilitate trading in digital asset derivatives by U.S. individuals.
Commissioner Summer K. Mersinger disagreed with the enforcement-first approach, advocating for public engagement over immediate regulatory action. Mersinger emphasized that no customer funds had been misappropriated and no fraudulent activities were identified, questioning the necessity of the enforcement actions.
Jake Chervinsky, Chief Policy Officer at the Blockchain Association, echoed Mersinger’s concerns, criticizing the CFTC’s approach and suggesting it could potentially infringe on the public’s rights.
“Perhaps we should lay to rest the idea that the CFTC is “a better regulator” for crypto than the SEC,” he said.
Regulatory Pilot Program
In light of the recent actions, CFTC Commissioner Caroline Pham has proposed a pilot program to foster a regulatory environment conducive to cryptocurrency innovation. The initiative aims to gather data to help create a secure framework for digital assets, leveraging existing regulations.
Pham warned that delays in adapting to the evolving landscape could hinder the U.S. in capitalizing on technological advancements, urging for proactive measures to facilitate economic growth through technological adoption.
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