Brian Armstrong, the CEO of Coinbase (NASDAQ:COIN), has urged decentralised finance (DeFi) protocols to legally oppose any governmental measures. Following recent enforcement actions by the Commodity Futures Trading Commission (CFTC) against various DeFi sites, Armstrong made his remarks on Thursday. The CFTC took action against the owners of Opyn, ZeroEx, and Deridex, three DeFi platforms, …
Brian Armstrong, the CEO of Coinbase (NASDAQ:COIN), has urged decentralised finance (DeFi) protocols to legally oppose any governmental measures. Following recent enforcement actions by the Commodity Futures Trading Commission (CFTC) against various DeFi sites, Armstrong made his remarks on Thursday. The CFTC took action against the owners of Opyn, ZeroEx, and Deridex, three DeFi platforms, last week for “offering illegal digital asset derivatives trading.” Unregulated DeFi exchanges have previously been described as a “obvious threat” to clients and regulated markets by the agency’s enforcement director, Ian McGinley. These protocols consented to pay civil monetary fines totaling $250,000, $200,000, and $100,000, respectively, as a result of the charges. The legitimacy of these accusations and the application of the Commodity Exchange Act to DeFi protocols were contested by Armstrong. He argued that these are not financial service providers and contended that the regulatory activities were driving a crucial sector of the economy abroad. He urged DeFi protocols to take these matters to court rather than settle them out of hand in order to set a judicial precedent.
The CEO of Coinbase’s remarks have prompted discussion among cryptocurrency enthusiasts. Some social media users supported Armstrong’s position, while others questioned if many DeFi networks are genuinely decentralised and how a decentralised protocol could sue someone. The CFTC has already taken enforcement action against DeFi protocols. The agency has dealt with instances involving Polymarket and Ooki DAO in the past. The CFTC and Polymarket reached a $1.4 million settlement, and in June, the agency won its legal battle with Ooki DAO. These instances show the CFTC’s dedication to upholding current rules in the DeFi sector, whether DeFi goods are distributed centrally or decentralizedly. However, Armstrong’s remarks draw attention to the continuous conflict between authorities and the expanding DeFi sector.
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