• CFTC Chairman Rostin Behnam clarified the agency’s view on DeFi. He stated that DeFi must comply with all financial regulations, despite being “just code”.
• The CFTC is looking into who are behind the DeFi apps and they will have to follow all financial rules on the books.
• Despite this, it remains unclear how the agency will enforce regulations on autonomous, non-compliant DeFi platforms.
CFTC Chair: Anonymity Won’t Protect DeFi from Regulators
CFTC Chairman Rostin Behnam recently clarified the agency’s stance on decentralized finance (DeFi) regulation. He made it clear that despite its self-executing nature and anonymity of developers, DeFI must still comply with all applicable financial regulations.
Who is Behind these Apps?
Behnam suggested that to understand whether a platform is following all applicable laws, one needs to know who created it and what products are being offered to US customers. As such, the agency will be probing into who is behind these applications in order for them to be compliant with existing regulations.
The CFTC’s stance raises questions about how it will enforce regulations on autonomous, non-compliant DeFi platforms. Currently, there isn’t agreement between US government agencies as to which one has jurisdiction over crypto assets; thus making enforcement even more difficult.
Impact of Regulations
These regulatory changes could have significant impacts on the future of DeFi projects and their development teams, as well as investors who put money into them hoping for profits or other benefits such as liquidity mining incentives or yield farming rewards.
In conclusion, despite its autonomous operations run by smart contracts without any need for intermediaries, CFTC Chair Rostin Behnam has made it clear that developers and investors behind DeFi applications must follow all financial rules and regulations set out by the government in order to stay compliant.