CFTC Commissioner Advocates Public Engagement Through Rulemaking for DeFi, Not Just Enforcement

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This article has been republished with permission from Binance News.

According to Cointelegraph: Commodity Futures Trading Commission (CFTC) Commissioner, Commissioner Summer K. Mersinger, has expressed concerns over the approach of the CFTC to decentralized finance (DeFi) protocols. Mersinger, in a public statement, argued that enforcement actions are not the best way to address novel DeFi technology. She believes that the CFTC should engage with the public and stakeholders through rulemaking instead of relying primarily on enforcement actions.

Mersinger expressed openness to applying rules to innovative situations, but noted that the Commission’s orders in these cases did not indicate any fraud or abuse of customer funds or victimization of market participants by DeFi protocols. She raised concerns regarding regulatory jurisdiction over DeFi protocols, the need for clear rules, and the potential consequences of enforcement in the absence of transparent rulemaking.

Despite these challenges, the CFTC’s Spring 2023 regulatory agenda does not include any rulemaking activities related to DeFi, leaving these issues largely unaddressed. The CFTC announced that it is taking regulatory action against three DeFi protocols, Opyn Inc., ZeroEx Inc., and Deridex Inc, for allegedly failing to register various derivatives trading offerings. Deridex and Opyn faced charges of not registering as a swap execution facility or designated contract market, as well as failing to register as a futures commission merchant. Additionally, the CFTC accused the two protocols of non-compliance with customer provisions outlined in the Bank Secrecy Act.
 



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