Coinbase CEO Brian Armstrong opposes CFTC enforcement actions against decentralized protocols (DeFi). Accordingly, Armstrong calls on the DeFi community to take the CFTC to court. Meanwhile, Coinbase says the SEC has cost millions of jobs in the US. That’s why he calls for regulatory clarity as soon as possible.
Brian Armstrong: DeFi should take the CFTC to court!
cryptokoin.com As you follow from , regulatory pressure on the crypto market continues. Citing recent enforcement cases filed by the Commodity Futures Trading Commission against several operators of decentralized finance protocols, Coinbase CEO Brian Armstrong says he hopes they will take the regulator to court. In this context, Armstrong makes the following statement on his X account:
The CFTC should not create enforcement actions against decentralized (DeFi) protocols. These are not financial services businesses. Moreover, it is unlikely that the Commodity Exchange Act would even apply to them. My hope is that DeFi protocols will set a precedent by taking these cases to court. The courts have proven very keen to uphold the rule of 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.
My hope is these DeFi protocols take these cases to court to…
— Brian Armstrong 🛡️ (@brian_armstrong) September 13, 2023
Last week, the CFTC settled charges against DeFi protocols Opyn, ZeroEx, and Deridex. He ordered them to pay administrative fines of $250,000, $200,000 and $100,000, respectively. It accused Deridex and Opyn of failing to register as a clearing execution facility or designated contract market, failing to register as a futures commission trader, and failing to adopt a customer identification program as part of the Bank Secrecy Act compliance program. ZeroEx also accused Opyn and Deridex of illegally offering leveraged and margined individual commodity transactions in crypto assets.
Coinbase blames SEC
Crypto exchange Coinbase says the US SEC’s sanctions-only approach is negatively impacting America. In a new blog post, Coinbase says that “while the majority of the world’s economic powers are embracing a technology that could expand economic opportunity, the SEC’s regulation through an enforcement-only approach is costing the United States millions of jobs and pushing opportunity offshore.” According to Coinbase, the SEC is taking an enforcement-only approach. In this context, Coinbase underlines the following:
Even though 9 in 10 Americans believe it is time to update the financial system to make it fairer and that the status quo is slowing progress, the sanctions-only approach remains. This enforcement-only approach continues despite 52 million people (or 1 in 5 Americans) owning crypto. This enforcement-only approach continues despite courts ruling against the SEC in a number of high-profile cases, including Grayscale, where courts found the SEC had acted in an ‘arbitrary and capricious’ manner.
Coinbase: Legislative approach is the best way forward!
Despite the SEC’s enforcement-based approach, Congress is taking steps to advance comprehensive crypto legislation. These efforts are critical to ensuring that the United States does not fall even further behind other jurisdictions. Therefore, Coinbase offers the following recommendation:
A legal approach to establishing crypto legislation is the best way to ensure consumer protection while also ensuring that digital asset innovation and the jobs it creates remain in the United States.
