The increasing enforcement actions against decentralized finance (DeFi) protocols are unpleasant and U.S. regulators should refrain from it, Coinbase CEO was seen to give such statements. The statement from the crypto exchange executive came in the wake of retaliating recent action of CFTC against several DeFi protocols.
In an X (Twitter) post on September 14, co-founder and chief executive officer at crypto exchange Coinbase, Brian Armstrong, criticized the enforcement actions of the Commodity and Futures Trade Commission (CFTC). He argued that the decentralized finance protocols are not similar to traditional financial service businesses.
Given DeFi’s dissimilarity with the financial businesses, it does not make sense to apply the same to the Commodity Exchange Act, Armstrong added.
The U.S. CFTC reported to take enforcement actions against three decentralized finance protocols. The regulator stated in the press release to settle with ZeroEx, Opyn, and Deridex by imposing fines on the protocols.
The commodity regulator imposed a penalty worth $200,000 on ZeroEx, $250,000 on Opyn, and a $100,000 fine on Deridex.
According to the regulator, all three entities were allegedly involved in leveraged and margin retail commodity transactions offering. The regulator cited it as illegal since it involves use of cryptocurrencies. While Deridex and Opyn were also accused of not registering with the regulator before providing services including swap executive facility and as future commission merchants. Additionally, the firms did not even apply to the customer identification program.
Coinbase CEO Suggests to Seek Court’s Intervention
Brian Armstrong believes that DeFi protocols can take legal action against regulatory enforcement. Coinbase executive looks at the court’s intervention optimistically given the recent orders in favor of crypto entities which he believes “uphold rule of law.”
Otherwise, such actions against the firms in the crypto industry force them to look offshore to move out their operations from the United States, Armstrong added.
Armstrong Thinks Crypto to Play Vital Role in 2024 Elections
Coinbase CEO Brian Armstrong believes that the cryptocurrency user community will exert significant influence in the 2024 presidential election. He anticipates that voters will inquire about candidates’ positions on cryptocurrency before selecting them as future leaders.
Armstrong also discussed the state of crypto regulations, innovations, and developments within the crypto exchange industry in the United States during the interview.
During the interview, Coinbase CEO emphasized that cryptocurrency will play a vital role in the upcoming elections.
According to Coinbase CEO, people will inquire if election candidates plan to maintain the current “unnecessarily hostile” regulations or create a favorable environment for technology. The candidates’ stance on fostering a facilitative environment for technological innovation will be a significant issue in determining whether the country can maintain its status as a leading technology hub or not.