CFTC Commissioner asserts that Decentralized Finance
("DeFi") likely violates the Commodity Exchange Act
("CEA") and that the regulator should respond
accordingly.
DeFi is an umbrella term encompassing a range of blockchain
financial markets designed to offer financial services through a
distributed platform that does not involve traditional financial
intermediaries such as banks, exchanges, and brokerages. DeFi
proponents argue that removing these intermediaries increases
efficiency and grants consumers more control over their investments
and trading activities. This is especially so in the cryptocurrency
space. For example, over $20 billion in cryptocurrency was traded
using DeFi as of January 2021—a twenty-fold increase from the
prior year. In response to this demand growth, DeFi platforms are
quickly proliferating.
