Three companies in the decentralized finance (DeFi) sector have been sanctioned by the U.S. Commodity Futures Trading Commission (CFTC) for violating derivatives trading rules.
The CFTC alleged that the three firms, Opyn Inc., ZeroEx Inc. and Deridex Inc., breached registration requirements, failed to implement know-your-client programs, and illegally offered leveraged commodity transactions involving digital assets.
“Each respondent engaged in these activities in connection with blockchain-based software protocols and smart contracts,” the CFTC said.
In settling the charges, the CFTC ordered that Opyn, ZeroEx and Deridex pay penalties of US$250,000, US$200,000 and US$100,000, respectively, and that they cease and desist from violating derivatives rules.
The regulator noted that the firms’ penalties were reduced, reflecting that all three cooperated with the investigation.
“Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts,” said CFTC director of enforcement Ian McGinley in a release.
“They do not,” he said. “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.”