- Coinbase executive says the Commodity Futures Trading Commission should not be creating enforcement actions against DeFi.
- Brian Armstrong hopes that these protocols take CFTC cases against them to court to establish a precedent.
- Armstrong expressed his confidence in US courts in upholding the rule of the law.
Coinbase CEO Brian Armstrong shared his views on the enforcement actions of the US Commodity Futures Trading Commission (CFTC) against DeFi protocols. Armstrong hopes that protocols take the CFTC to court to fight the enforcement actions.
The CFTC has charged DeFi protocols Opyn, ZeroEx and Deridex for offering allegedly illegal digital asset derivatives trading. The protocols settled the charges with the regulator via monetary settlements.
Also read: XRP price recovers as Ripple CTO foresees buying pressure on the altcoin
Coinbase CEO condemns CFTC enforcement actions on DeFi protocols
Brian Armstrong believes that the CFTC should not be creating enforcement actions against decentralized (DeFi) protocols. Armstrong says that it is highly unlikely that the Commodity Exchange Act even applies to DeFi projects. Rather than acting depressed about the situation, Armstrong extolled US courts for, in his telling, being willing to uphold the rule of the law.
The CFTC should not be creating enforcement actions against decentralized (DeFi) protocols. These are not financial service businesses, and it’s highly unlikely the Commodity Exchange Act even applies to them.
— Brian Armstrong ️ (@brian_armstrong) September 13, 2023
My hope is these DeFi protocols take these cases to court to…
Armstrong is likely referring to CFTC’s recent actions against DeFi protocols Opyn, ZeoEx and Deridex and the subsequent civil monetary penalties of $250,000, $200,000, and $100,000 the protocols paid, respectively.
The CFTC’s stance on DeFi exchanges becomes clear from Enforcement Director Ian McGinley’s speech at a conference hosted by the Practising Law Institute. McGinley said:
The existence of unregulated DeFi exchanges is an obvious threat to the markets regulated and customers protected by the CFTC, and it is one we have taken very seriously.
Armstrong argues that the CFTC does not have regulatory authority over Decentralized Finance protocols and that enforcement actions could push an important industry like DeFi offshore with its enforcement activities.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
XRP sustains bullish momentum despite SEC's appeal against Ripple
XRP continued trading above the $3 mark on Thursday as investors stepped on the accumulation gear following rumors of Donald Trump considering its addition to a US digital asset reserve.
Upbit crypto exchange faces suspension in South Korea over alleged KYC violations
Cryptocurrencies aggregate market capitalization consolidated at $3.5 trillion on Thursday rising by $152 billion within the last 24 hours. Altcoin markets rose by 9%.
Binance bulls target $750 as Trump drives crypto trading volumes to a record high
BNB price crossed the $715 on Thursday as traders continued to take strategic speculative positions ahead of the US Presidential inauguration slated for January 20.
Ethereum Price Forecast: Staking could spark ETH rally in 2025 as PostFinance launch stirs bullish sentiment
Ethereum experienced a 3% decline on Thursday despite growing excitement over the launch of ETH staking services by PostFinance AG. Investors are optimistic that this development may lead to the approval of staking in Ethereum ETFs.
Bitcoin: Room for a recovery or continuation of the pullback?
Bitcoin’s price slightly recovers and trades around $94,700 on Friday after declining nearly 6% earlier this week. US Bitcoin spot Exchange Traded Funds data shows signs of mild recovery, with a total net inflow of $462.2 million until Thursday.
Trusted Broker Reviews for Smarter Trading
VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.