So the CFTC is stepping up its game in the DeFi world. They just hit up Opyn, ZeroEx, and Deridex with some charges. These companies, all based in Delaware and California, are now facing fines of $250,000 for Opyn, $200,000 for ZeroEx, and $100,000 for Deridex. Looks like the regulators are really paying attention to decentralized finance these days.
I always find it weird that these companies register themselves and then launch a so-called defi platform and assume they can be free from government scrutiny. Most of the time they just launch a smart contract and then mint their own tokens while blocking people here and there. I guess the profit outweighs the cons since they just get fined for less than $1 million for now.
It's the name that matters, you can sell now everything in crypto just with a label, and furthermore, I think it's getting worse, if a "project" doesn't have DefI, NFT, and many other stupid things in its description it doesn't get any traction. You need to cram everything in its whitepaper despite knowing you're going to end with a copycat of a copycat of a CEX and a shitty token.
Completely decentralized, permissionless and censorship resistant also I assume!
I don't think that's the case for all of those platforms:
So this one went bust before even being fined, the other one is powered by a token with $400k in market cap, so hardly affordings millions.
Not all DeFi is Decentralized. projects that want to attract investment have many levers for managing projects, even to the point of stopping ecosystems.
And you are right that the fine is very small even for a small project, but the Commodity Futures Trading Commission does not kill projects, as the SEC does.
But even non-decentralized DeFi projects for the crypto industry are better than their absence.
Defi is a marketing keyword. It has no relation with the decentralisation. So anyone can use the term Defi but it doesn't necessarily have to be decentralised in any way. So I think CFTC is just doing their job.
I foresee an increase in such kind of regulatory actions in future in the crypto related companies. It could be anything but many governments have now understood that they can't stop cryptocurrency. So now their focus is to control them.
The strict policy pursued by the United States against the crypto industry has led to a decline in its leadership position in the world.
A study that takes into account the presence and accessibility of cryptocurrencies revealed that the United States fell to third place after recording a 6.5% drop in its score from 7.7 in 2022 to 7.25 in 2023. Conversely, the degree of readiness for cryptocurrencies jumped in Switzerland increased by more than 9% from 7.5 to 8.18 ranking second in the world. While Hong Kong ranked first with a Cryptocurrency Readiness Score (CRS) of 8.36.
https://forexsuggest.com/worldwide-crypto-readiness-report-2023/
https://markets.businessinsider.com/news/currencies/defi-crypto-exchange-token-wash-trading-fraud-price-manipulation-2023-9
"At least $2 billion on decentralized crypto exchanges has been wash traded since 2020, according to a new report.
Wash trading is a form of market manipulation where a fraudster is trading with themselves.
The trend runs contrary to the general view of DeFi exchanges, which are regarded as safer than centralized exchanges.
Decentralized crypto exchanges are a hotbed for a certain type of fraud known as wash trading, according to a new report from Solidus Labs."
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DeFi Ecosystems are also changing and there is a lot of fraud there. On the one hand, I agree that if these eco-systems are not regulated, then there will be a lot of fraud.