Coinbase CEO Supports DeFi Protocols After CFTC’s Enforcement Action

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.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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