The Commodity Futures Trading Commission (CFTC) has stepped up its focus on the digital asset decentralized finance (DeFi) sector, releasing Synchronize orders Against Opyn, ZeroEx and Deridex, Inc.
The charges stem from allegations of offering illegal digital asset derivatives trading and failing to comply with regulatory requirements.
CFTC targets DeFi operators
Opyn, a Delaware-registered company headquartered in California, was charged with failing to register as a swap execution facility (SEF) or designated contract market (DCM), failing to register as a futures commission merchant (FCM), and neglecting to adopt Customer identification program as part of the Bank Secrecy Act compliance program.
ZeroEx, also based in California, and Deridex, Inc., a Delaware company based in North Carolina, have also been accused of illegally offering digital asset leverage and margin retail commodity trading.
These fees revolve around the activities of companies within the DeFi ecosystem, specifically blockchain-based software protocols and smart contracts.
These protocols function similarly to trading platforms, enabling users to trade in a decentralized environment.
The CFTC order requires Opyn, ZeroEx and Deridex to pay civil penalties of $250,000, $200,000 and $100,000 respectively. Additionally, according to the charges, they must cease violating the Commodity Exchange Act (CEA) and CFTC regulations.
Enforcement Director Ian McGinley emphasized the CFTC’s commitment to promoting “unregistered platforms” that facilitate digital asset derivatives trading. McKinley said:
Along the way, DeFi operators realized that, powered by smart contracts, illegal transactions would become legal. they do not.
Opyn, which specifically developed and deployed the Opyn protocol, provides trading of digital asset derivative tokens called oSQTH.
ZeroEx developed the 0x protocol and a front-end application called Matcha that enables users to trade digital assets with leverage.
Deridex developed the Deridex protocol to facilitate the trading of “perpetual contracts” as leveraged derivatives positions.
The CFTC found that these activities constituted swaps and leveraged or margined retail commodity transactions, which required registration and compliance with CFTC regulations.
It is alleged that the Respondents failed to properly register as a SEF or FCM and failed to implement the necessary compliance programs.
While DeFi presents unique challenges due to its novelty, complexity, and continued evolution, the CFTC Enforcement Division remains committed to continuing to combat this emerging industry, aggressively pursuing those operating unregistered entities that allegedly allow Americans to trade digital asset derivatives. platform people.
This latest enforcement action highlights the increasing scrutiny on DeFi operators and the growing need for regulatory clarity in the rapidly evolving digital asset landscape.
As the Commodity Futures Trading Commission continues to guide this emerging field, market participants must ensure compliance with existing regulations to avoid potential legal consequences.
Featured image from iStock, chart from TradingView.com