Coinbase CEO Brian Armstrong has advised the United States Commodities and Futures Trading Commission (CFTC) against pursuing enforcement actions targeting decentralized finance (DeFi) protocols.
Coinbase CEO Brian Armstrong has recently expressed his support for decentralized finance (DeFi) protocols. In a recent update on social media, Armstrong suggested that DeFi protocols consider taking legal action through the courts to establish a precedent.
He pointed out the consistent commitment of the legal system in upholding the rule of law. Additionally, he expressed concern that the current approach is leading this important industry toward international jurisdictions.
In his recent message on X, formerly known as Twitter, the individual conveyed a suggestion that the United States Commodities and Futures Trading Commission (CFTC) should exercise caution when it comes to enforcing actions against DeFi protocols.
The argument was that these protocols function distinctly compared to traditional financial service businesses. Furthermore, there exists uncertainty surrounding the relevance of the Commodity Exchange Act to their operations.
Last week, three DeFi companies in the U.S. faced enforcement measures from the CFTC for their alleged involvement in unapproved cryptocurrency derivative trading activities. According to the regulator, these platforms were accused of facilitating unlawful crypto derivative trading without obtaining the necessary registrations.
DeFi &Cryptocurrency Firms Face Rising U.S. Regulatory Heat
Besides Brian Armstrong, several lawmakers have also supported DeFi protocols. The emphasis on prioritizing the creation of clear and transparent regulations for DeFi, rather than rushing into enforcement actions, was underscored by Republican Commissioner Summer Mersinger.
She expressed concern about the commission’s apparent favoritism towards enforcement measures, whereas her stance leans towards prioritizing public engagement and establishing well-defined guidelines as the primary focus.
The U.S. Commodity Futures Trading Commission (CFTC) recently achieved a significant legal victory. They successfully prosecuted Ooki DAO for running an illegal trading platform and violating multiple regulatory rules. In June 2023, a federal judge ruled in favor of the CFTC, resulting in the shutdown of Ooki DAO and the imposition of a fine exceeding $600,000.
In recent months, cryptocurrency companies in the United States have faced increased scrutiny from regulatory agencies. Notably, well-known authorities like the U.S. SEC have launched investigations into prominent entities such as Coinbase and Binance.
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