{"id":269955,"date":"2021-06-09T06:16:53","date_gmt":"2021-06-09T03:16:53","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/after-googling-it-cftc-boss-says-defi-is-a-bad-idea-and-probably-illegal\/"},"modified":"2021-06-09T06:16:53","modified_gmt":"2021-06-09T03:16:53","slug":"after-googling-it-cftc-boss-says-defi-is-a-bad-idea-and-probably-illegal","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/after-googling-it-cftc-boss-says-defi-is-a-bad-idea-and-probably-illegal\/","title":{"rendered":"# After googling it, CFTC boss says DeFi is a \u2018bad idea\u2019 and probably illegal"},"content":{"rendered":"

“# After googling it, CFTC boss says DeFi is a \u2018bad idea\u2019 and probably illegal <\/strong>”
\n<\/p>\n

Commissioner Dan M. Berkovitz of the Commodity Futures Trading Commission (CFTC) believes DeFi derivatives platforms may contravene the Commodity Exchange Act (CEA).<\/p>\n

Speaking as part of a June 8 keynote address dubbed \u201cClimate Change and Decentralized Finance: New Challenges for the CFTC,\u201d Berkovitz notes<\/a> that: <\/p>\n

\u201cNot only do I think that unlicensed DeFi markets for derivative instruments are a bad idea, but I also do not see how they are legal under the CEA.\u201d<\/p><\/blockquote>\n

Berkovitz noted that the \u201cCEA requires futures contracts to be traded on a designated contract market (DCM) licensed and regulated by the CFTC,\u201d however he asserts that no DeFi platforms are registered as DCMs or SEFs. <\/p>\n

During the keynote, the commissioner emphasized the need for regulators to become familiar with DeFi derivatives and other app<\/a>lications amid the booming growth of the sector. <\/p>\n

He referenced the huge amount of liquidity pumped into the market over the past twelve months, noting that now that \u201cyou\u2019re talking real money\u201d there needs be stringent regulation in place to protect DeFi consumers: <\/p>\n

\u201cGiven the explosive growth of this sector, federal regulators should become familiar with this new technology<\/a> and its potential uses and be prepared to protect the public against misuse.\u201d<\/p><\/blockquote>\n

Interestingly, Berkovitz references a Wikipedia definition of DeFi, and notes that his research was based in part on a Google search. “If you type \u201cDeFi\u201d into Google search, a top link is to a CoinDesk article, ‘What is DeFi?’;” he said.”[It’s] an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermedia<\/a>ries.\u201d<\/p>\n

The Co-founder of Coin Metrics Jacob Franek was quick to criticize the commissioner’s research, noting that he \u201cneeds to do more than read a CoinDesk article\u201d: <\/p>\n

\n

And if this is the end stage of the CFTC’s analysis — ooh boy — we have some educating to do or the Commissioner needs to do more than read a Coin Desk article. https:\/\/t.co\/AERH4IOTUa<\/a><\/p>\n

\u2014 Jacob Fran\u039ek (@panekkkk) June 9, 2021<\/a><\/p><\/blockquote>\n