CFTC to Ox DeFi Protocol: Low Token Trading Volume Puts Crypto Investors at Higher Risk – Take Heed!

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Opyn, Ox, and Deridex, DeFi protocols, who reportedly failed to register a number of derivatives trading offerings, were subject to regulatory action. On September 8, 2023, the CFTC accused them of trading in illegitimate futures involving digital assets. Crypto phile Amara Khatri wrote about this circumstance in the article that follows.


The United States Commodity Futures Trading Commission (CFTC) has initiated regulatory action against three major decentralized finance (DeFi) protocols, Opyn, 0x, and Deridex. 

The commodities regulator has handed out hefty fines of $250,000, $200,000, and $100,000, respectively, on the three protocols.

Commodity Futures Trading Commission Swings Into Action

Regulatory action against the three decentralized finance protocols was taken after they allegedly failed to register various derivatives trading offerings, with the CFTC charging them with illegal digital asset derivatives trading. The CFTC announced that it had issued orders against Opyn, 0x, and Deridex in a statement released on the 8th of September.

“The Commodity Futures Trading Commission today continued its enforcement focus in the digital asset decentralized finance (DeFi) space by issuing orders simultaneously filing and settling charges against Opyn, Inc., a Delaware-registered company based in California; ZeroEx, Inc., a Delaware company based in California; and Deridex, Inc., a Delaware company based in North Carolina.”

More specifically, 0x was charged by the CFTC for a token issued by a third party that was not affiliated with the protocol. This third part provided traders a 2:1 leveraged exposure to digital assets such as Bitcoin and ETH. Meanwhile, Opyn and Deridex were charged for failing to register as a swap execution facility or a designated contract market and also failing to register as a futures commodity merchant. Additionally, the two protocols failed to comply with customer provisions set out in the Bank Secrecy Act.

The three firms were also charged with illegally offering leveraged and marginal retail commodity transactions in digital assets.

“Deridex and Opyn are charged with failing to register as a swap execution facility (SEF) or designated contract market (DCM), failing to register as a futures commission merchant (FCM), and failing to adopt a customer identification program as part of a Bank Secrecy Act compliance program, as required of FCMs. ZeroEx, Opyn, and Deridex are also charged with illegally offering leveraged and margined retail commodity transactions in digital assets.”

Hefty Penalties Levied

As such, the Commodity Futures Trading Commission has levied a fine of $250,000 on Opyn, $200,000 on 0x, and $100,000 on Deridex. It also ordered the three protocols to cease and desist from violating the Commodity Exchange Act and the CFTC’s own regulations. All three have agreed to settle the charges with the CFTC.

“The orders require that Opyn, ZeroEx, and Deridex pay civil monetary penalties of $250,000, $200,000, and $100,000, respectively, and cease and desist from violating the Commodity Exchange Act (CEA) and CFTC regulations, as charged.”

DEX aggregator Matcha, developed by 0x, also issued an update on X, stating it had cooperated with the CFTC to resolve an inquiry.

“0x, the developer of DEX aggregator Matcha, recently cooperated with the CFTC to resolve an inquiry regarding tokens constituting less than 0.1% of Matcha’s trading volume since inception. As part of our efforts to drive sustained web3 adoption, our team appreciates the CFTC’s bringing these tokens to our attention.”

DeFi Needs To Act Within The Law

Speaking about the regulatory action against the three DeFi protocols, the CFTC’s director of enforcement, Ian McGinley, stated,

“Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts. They do not. 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 US persons to trade digital asset derivatives.”

However, not everyone was thrilled about the latest enforcement action by the Commodity Futures Trading Commission. Bankless co-host Ryan Sean Adams called the action against the three protocols another attack on the DeFi ecosystem by regulators.

“Opyn, ZeroEx, and Deridex were all hit by the CFTC. Another attack on DeFi by US regulators. They really are trying to make America lose the crypto opportunity.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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