- The U.S. government has escalated its crackdown on crypto firms.
- The CFTC charged three DeFi firms in a string of latest operations.
- All three entities were fined and slapped with further orders.
Crypto crackdowns in the U.S. seem to have escalated, with the latest enforcement action from the Commodity Futures Trading Commission (CFTC).
On September 7, the derivatives market watchdog brought alleged illegal trading charges against three prominent decentralized finance (DeFi) entities in the country: Opyn, Inc., ZeroEx, Inc., and Deridex, Inc., all registered in Delaware.
Multiple Registration Violations
The CFTC charged Deridex and Opyn with failing to register as a futures commission merchant (FCM) when they deployed their blockchain protocols and solicited users to deposit assets into smart contracts concerning leveraged retail commodity transactions.
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The two DeFi entities were also charged with failing to register as a designated contract market (DCM) or a swap execution facility (SEF) after the commission established that they illegally operated facilities that offered trading and swap processing services.
Opyn, ZeroEx, and Deridex were all charged with illegally offering leveraged and margined retail commodity transactions in digital assets.
“Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts. They do not. The DeFi space may be novel, complex, and evolving, but the Division of Enforcement will continue to evolve with it and aggressively pursue those who operate unregistered platforms that allow U.S. persons to trade digital asset derivatives,” CFTC Director of Enforcement Ian McGinley said.
A Cease-and-Desist Order
The derivatives market watchdog has ordered Opyn, ZeroEx, and Deridex to cease violating CFTC regulations and the Commodities Exchange Act (CEA) and to pay civil monetary penalties of $250,000, $200,000, and $100,000, respectively.
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The September 7 development is part of an ongoing string of enforcement actions by the CFTC, including settling the largest Bitcoin forex fraud case in the derivatives market history.
Learn how Binance’s SEC lawsuit differs from the CFTC case:
Binance Sued: How SEC Lawsuit Differs from CFTC Case
Read why the CFTC’s position on crypto is at odds with that of the SEC:
CFTC Opposes SEC’s Crypto Position: Calls ETH and Stablecoins Commodities
