CFTC Charges DeFi Protocols for AML Violations and Unlicensed Operations
On September 8th, the U.S. Commodity Futures Trading Commission (CFTC) resolved charges against three decentralized finance (DeFi) companies. According to the CFTC, Opyn, ZeroEx, and Deridex have not complied with AML regulations and other licensing standards. Furthermore, the move attempts to include DeFi operators within the framework of current financial rules.
Tightening of Licensing Restrictions
The accused DeFi platforms allegedly ran their operations without the proper U.S. authorizations. In addition to fines for failing to restrict access to their media from inside the United States, Opyn and Deridex were charged with operating without being registered as a swap execution facility or designated contract market.
Furthermore, the customer requirements of the Bank Secrecy Act were not met during these operations.
CFTC’s Findings and Sentence
As a result, Opyn, ZeroEx, and Deridex settled with the CFTC for $250,000, $200,000, and $100,000 respectively. Nonetheless, the CFTC’s decision has been criticized, including a public dissent statement by CFTC Commissioner Summer K. Mersinger claiming regulatory procedures limit innovation rather than support responsible growth in the DeFi industry.
While the DeFi community works through the fallout from these allegations, the CFTC has designed to bring this decentralized industry within its jurisdiction. The Director of Enforcement of the Commodity Futures Trading Commission, Ian McGinley, stated:
“Unlawful transactions do not become lawful when facilitated by smart contracts.”
Hence, as DeFi grows and attracts mainstream attention, these cases may serve as a wake-up call for the industry. Moreover, regulatory compliance can no longer be an afterthought since it needs to be at the forefront of DeFi development and operations.
Despite the uniqueness and complexity of the DeFi space, it is evident that it must develop in conjunction with current legal frameworks if it is to grow sustainably. Moreover, the innovation potential might be severely hindered if regulatory interventions are maintained.
- Expert Warns More Crypto Bloodbath Ahead of CPI Data Tomorrow
- US President Promises Deal With China on Everything As ‘Trump Insider’ Begins To Close Bitcoin Shorts- Is A BTC Recovery Ahead?
- Just-In: Changpeng “CZ” Zhao Counters Peter Schiff, Says “Tokenizing Gold Is Not On-Chain Gold”
- $240 Million Hacked Crypto Exchange WazirX Reopens Deposits But Faces Community Backlash
- Expert Flags Pi Network Team as Source of Selling Pressure After Reported 1.2M PI Dump
- BNB Price Forecast: Analysts Eye $1500 Ahead of Fresh Coinbase and Robinhood Listings
- XRP Price Classical Pattern Points to a Rebound as XRPR ETF Hits $100M Milestone
- Chainlink Price Eyes $27 Rebound as Whales Accumulate 54M LINK
- Pi Network Price Wedge Signals a Rebound as Key Upgrades Raise Utility Hopes
- Solana Price Eyes $240 Recovery as Gemini Launches SOL-Reward Credit Card
- XRP Price Prediction Amid Evernorth’s $1B XRP Treasury Plan – Can XRP Hit $5?
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
