DEFIREGULATION

CFTC Chairman Rostin Behnam: Unsupervised DeFi is like an unlicensed doctor

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CFTC Chairman Rostin Behnam: Unsupervised DeFi is like an unlicensed doctor

The Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, emphasized the importance of regulating decentralized finance (DeFi) in his speech on Monday, likening unsupervised DeFi to "unlicensed doctors." He stated that regulatory authorities should be proactive and not wait until victims suffer before taking action.

CFTC Continues to Fine DeFi Protocols

The Commodity Futures Trading Commission (CFTC) reached settlements in early September with DeFi protocols Opyn, ZeroEx, and Deridex, imposing civil penalties of $250,000, $200,000, and $100,000 respectively.

Deridex and Opyn were charged with failure to register as foreign exchange swap execution facilities or designated contract markets, failure to register as futures commission merchants, and failure to adopt customer identification programs as part of their Bank Secrecy Act compliance program. ZeroEx, Opyn, and Deridex were also accused by regulators of illegally offering digital asset leveraged and margined retail commodity transactions.

These DeFi Protocols Like Unlicensed Doctors

According to The Block's report, Behnam spoke at the Chicago Futures Industry Association Expo, stating that regulators should not wait until victims are in pain and crying for help before taking proactive action. Ensuring critical market oversight, robust cybersecurity and system safeguards, and customer protection are the mission and purpose of the CFTC.

Think about it, if only certain people were required to have driver's licenses, would you feel safe on the road? Or, if given the choice, would you entrust your healthcare to an untrained or unlicensed doctor?

Brian Armstrong States Commodity Trading Laws Should Not Apply to DeFi

Coinbase CEO Brian Armstrong has also shared his views on the matter, hoping that these DeFi protocols will go to court and set a precedent.

CFTC should not take enforcement actions against DeFi protocols. They are not financial service businesses, and the Commodity Exchange Act is unlikely to apply to them.