CFTC Charges 3 DeFi Protocols Over Illegal Derivatives Offerings

CFTC Cracks Down on DeFi Protocols for Regulatory Violations and Imposes Fines.
CFTC Issues Orders Against Operators of Three DeFi Protocols for Offering Illegal Digital Asset Derivatives Trading

The Commodity Futures Trading Commission issued an order against three DeFi protocols, including Opyn, ZeroEx, and Deridex, for providing digital asset derivatives trading. 

In the complaint, CFTC charged Deridex and Opyn with failing to register as a swap execution facility (SEF) or designated contract market (DCM), failing to register as a futures commission merchant (FCM), and failing to adopt a customer identification program as part of a Bank Secrecy Act compliance program, as required of FCMs. 

Additionally, all accused protocols were charged with illegally offering leveraged and margined retail commodity transactions in digital assets. 

The order mandates Opyn, ZeroEx, and Deridex to settle civil fines amounting to $250,000, $200,000, and $100,000, respectively. While also requiring them to halt any actions that infringe upon the Commodity Exchange Act (CEA) and regulations set forth by the CFTC.

The Director of Enforcement, Ian McGinley said, “Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts.” He added, “They do not.”

Also Read: CFTC Commissioner Proposes A Pilot Program to Regulate Crypto

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