CFTC Charges Three DeFi Operations with Illegal Derivatives Trading


This article has been republished with permission from Binance News.

According to CoinDesk, the Commodity Futures Trading Commission (CFTC) has charged three decentralized finance (DeFi) operations – Opyn, Inc., ZeroEx (0x), Inc. and Deridex, Inc. – with offering illegal derivatives trading. The companies face accusations based on their use of blockchain-based protocols and smart contracts to function as trading platforms. The CFTC is ordering Opyn, ZeroEx, and Deridex to cease the activity and pay penalties of $250,000, $200,000, and $100,000, respectively. The companies agreed to these terms to settle the charges.

CFTC Director of Enforcement Ian McGinley stated that unlawful transactions do not become lawful when facilitated by smart contracts. All three companies are accused of illegally offering leveraged and margined retail commodity transactions using digital assets. Opyn, a DeFi marketplace associated with the token oSQTH, is a California-based company that the CFTC also accused of failing to properly register as a swap execution facility, a designated contract market and a futures commission merchant, and also failing to set up a customer identification program to meet Bank Secrecy Act requirements. Deridex, a North Carolina company, was also accused of those additional violations.

Those companies and ZeroEx, known for its 0x protocol, were all said by the CFTC to have cooperated in the investigation, getting a reduced financial penalty as a result. One CFTC commissioner dissented in the enforcement vote, expressing concern that the Commission is taking another step down the path of bringing enforcement actions when they should be engaging with the public.

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