• CFTC Chair Rostin Behnam clarified that DeFi must comply with all financial regulations, despite being “just code”.
• The agency will probe into who is behind the DeFi apps and will enforce regulation on autonomous, non-compliant DeFi platforms.
• SEC Chair Gary Gensler claims all crypto assets except Bitcoin are securities.
CFTC Stance on DeFi Regulation
CFTC Chair Rostin Behnam has clarified that DeFi must comply with all financial regulations, despite being “just code”. According to the latest remarks by the Commodity Futures Trading Commission (CFTC) Chairman, developers and investors behind DeFi applications are often anonymous individuals and they must follow all financial rules on the books.
Probing Who Is Behind The Apps
Behnam suggested that the agency will probe into who is behind DeFi apps to ensure compliance with regulations. The developers and investors often retain the controlling stake in a DeFi application which enables them to change the rules at will.
Enforcing Regulations On Autonomous Platforms
The CFTC’s stance raises questions about how it will enforce regulation on autonomous, non-compliant DeFi platforms. US government agencies don’t agree on which agency has jurisdiction over crypto assets and this could make enforcement difficult.
SEC Jurisdiction Over Crypto Assets
The Securities and Exchange Commission’s (SEC) jurisdiction overlaps with CFTCs and SEC Chair Gary Gensler claims all crypto assets except Bitcoin are securities. This means that these assets would have to be regulated like other securities such as stocks or bonds under SEC oversight.
Conclusion
The latest remarks by CFTC Chairman Rostin Behnam suggest that regulators have their sights set on DeFI applications as well as other cryptocurrency projects in an effort to protect customers from potential fraud or abuse of power by anonymous developers or investors behind these projects. Despite some confusion regarding jurisdiction between U.S government agencies, it is clear that regulators are taking steps towards enforcing existing regulations in order to prevent any potential harm from occurring as a result of unchecked development in this space
