• CFTC Chair Rostin Behnam stated that DeFi applications must comply with all financial regulations, despite its autonomous and anonymous nature.
• The real question is what these protocols do and who ultimately runs them, according to Behnam.
• However, there remain questions about how the CFTC will enforce regulations on non-compliant DeFi platforms.
CFTC Chair Comment on DeFi Regulations
CFTC Chairman Rostin Behnam recently clarified the agency’s view on DeFi regulation. He underlined that DeFi apps must comply with all financial rules on the books, despite its autonomous and anonymous nature.
What Are The Questions?
Behnam suggested that the key questions are what these protocols do and who ultimately runs them. “It’s really about what are U.S. customers being offered and exposed to,” he said. “And who is either the individual or group of individuals who set up that entity, that code, to offer those products?”
The stance raises questions about how it will enforce regulations on autonomous, non-compliant DeFi platforms in the US market where government agencies don’t agree on which agency has jurisdiction over crypto assets.
SEC’s Overlapping Jurisdiction
Securities and Exchange Commission (SEC) Chair Gary Gensler claims all crypto assets except Bitcoin are securities which adds another layer of complexity since SEC’s jurisdiction overlaps with CFTCs when it comes to enforcing regulations for crypto assets.
Despite concerns from proponents of DeFi applications, CFTC Chairman Rostin Behnam has made it clear that all financial rules must be followed regardless of anonymity or self-executing nature of DeFI apps in order to protect U.S customers from potential harm caused by unregulated activities in this sector.