CFTC Cracks Down on DeFi Giants: Settlements with 0x Protocol, Opyn, and Deridex

DeFi Operators Misguided on Smart Contracts

Ian McGinley, CFTC’s Director of Enforcement, emphasized that DeFi operators' belief that smart contracts make unlawful transactions lawful is mistaken, asserting, "They do not."

ZeroEx Inc.'s 0x Protocol Under Scrutiny

The CFTC targeted ZeroEx Inc., the creator of 0x Protocol, and its frontend Matcha. Allegedly, Matcha traded leveraged tokens tied to BTC, ETH, and other assets. The CFTC emphasized that such tokens are commodities and can only be offered on registered exchanges.

Decline of 0x's Former Prominence

Once a promising Ethereum-based decentralized exchange contender, 0x Protocol's popularity waned over the years. Market rankings indicate its descent, with ZRX token dropping below the top 700 cryptocurrencies. This action by the CFTC is significant, as it addresses one of DeFi's former leading platforms.

Opyn and Deridex Also in the Crosshairs

Opyn, a decentralized Ethereum and stablecoin investment platform, faced charges for offering commodities on unregistered exchanges. Similarly, Deridex, a defunct Algorand-based trading platform, was targeted for its perpetual contracts qualifying as commodities.

Charges and Penalties Imposed

All three platforms faced charges for illegal offers of leveraged and margined retail commodity transactions. The CFTC imposed different monetary penalties: Opyn must pay $250,000, ZeroEx $200,000, and Deridex $100,000. These settlements coincide with the filing of charges.

CFTC's Expanding Crypto Actions

This marks another entry in the CFTC's increasing list of crypto-related actions. The agency recently concluded a fraud case against Mirror Trading International and took action against an individual pool operator. Major crypto companies, including Binance, FTX, Tether, and BitMEX, have also been targeted by the CFTC in its recent enforcement efforts.