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After googling it, CFTC boss says DeFi is a ‘bad idea’ and probably illegal


Commissioner Dan M. Berkovitz of the Commodity Futures Trading Commission (CFTC) believes DeFi derivatives platforms may contravene the Commodity Exchange Act (CEA).

Speaking as part of a June 8 keynote address dubbed “Climate Change and Decentralized Finance: New Challenges for the CFTC,” Berkovitz notes that:

“Not 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.”

Berkovitz noted that the “CEA requires futures contracts to be traded on a designated contract market (DCM) licensed and regulated by the CFTC,” however he asserts that no DeFi platforms are registered as DCMs or SEFs.

During the keynote, the commissioner emphasized the need for regulators to become familiar with DeFi derivatives and other applications amid the booming growth of the sector.

He referenced the huge amount of liquidity pumped into the market over the past twelve months, noting that now that “you’re talking real money” there needs be stringent regulation in place to protect DeFi consumers:

“Given the

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