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CFTC Files Charges Against Three DeFi Protocols

CFTC DeFi Protocols Opyn ZeroEx Deridex
By Nicolo Finazzi
Nicolo Finazzi

2 Min

September 12, 2023
  • CFTC charges Opyn, ZeroEx, and Deridex with various violations.
  • Violations include lack of licenses, failure to block US users, and not registering as required.
  • Civil monetary penalties of $250K, $200K, and $100K imposed.

The U.S. Commodities and Futures Trading Commission (CFTC) recently took action against three prominent DeFi protocols – Opyn, ZeroEx (0x), and Deridex. The charges against the protocols include multiple violations, including unauthorized leveraged and margined retail commodity transactions in digital assets. A primary concern was their failure to secure the required licenses for operations within the United States.

Deridex and Opyn faced additional charges for not registering as a swap execution facility (SEF) or designated contract market (DCM) and for not registering as a futures commission merchant (FCM). They were also found guilty of failing to block U.S. users, a violation of anti-money laundering regulations under the Bank Secrecy Act.

The CFTC issued "cease and desist" orders against these DeFi projects and imposed civil monetary penalties. Opyn, ZeroEx, and Deridex will have to pay fines of $250,000, $200,000, and $100,000, respectively. All three entities were based in Delaware and located in North Carolina.

Notably, ZeroEx was charged for offering "2:1 leveraged exposure to digital assets such as ether and bitcoin," a product allowed only on registered exchanges following CEA and CFTC regulations.

The CFTC's enforcement actions have generated significant debate. While some view them as necessary steps to regulate the DeFi space, others, including CFTC Commissioner Summer K. Mersinger, argue that they stifle innovation and fail to align with the Commission's mandate.

It is clear, however, that these actions signal a growing regulatory focus on decentralized finance, raising questions about the future of DeFi protocols and their compliance with U.S. laws.

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