CFTC Initiates Enforcement Sweep Targeting Opyn and Other DeFi Operations

The Commodity Futures Trading Commission (CFTC) announced on Thursday that it has filed charges against three decentralized finance (DeFi) entities – Opyn, Inc., ZeroEx (0x), Inc., and Deridex, Inc. – for allegedly engaging in unlawful derivatives trading activities.

The CFTC has raised multiple allegations against the three companies for their utilization of blockchain-based protocols and smart contracts in their trading platform operations. In response, the U.S. derivatives regulator has mandated Opyn, ZeroEx, and Deridex to discontinue these infractions and levy fines of $250,000, $200,000, and $100,000, respectively. These firms have willingly accepted these conditions as part of a settlement to resolve the allegations.

“Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts,” said CFTC Director of Enforcement Ian McGinley. “They do not.”

However, the CFTC could have had a particularly close connection with 0x, as it appointed an interim director of LabCFTC who previously worked at 0x Labs. Jason Somensatto assumed leadership of the agency's financial technology research division in 2021 and currently holds the position of Head of Policy in North America for Chainalysis.

The CFTC has alleged that all three companies engaged in unlawful activities by providing leveraged and margined retail commodity transactions utilizing digital assets.

Opyn, a DeFi marketplace linked to the oSQTH token, is headquartered in California. The CFTC has also alleged that the company failed to adequately register as a swap execution facility, a designated contract market, and a futures commission merchant. Furthermore, Opyn was found to be in non-compliance with the Bank Secrecy Act's customer identification program requirements. Similarly, Deridex, a company based in North Carolina, faced accusations of these same violations.

The CFTC stated that both those companies and ZeroEx, renowned for its 0x protocol, actively collaborated in the investigation, leading to a decreased financial penalty for their cooperation.

Opyn and 0x representatives did not provide an immediate response to requests for comment, and CoinDesk was unable to identify a spokesperson for Deridex. On Thursday, an account affiliated with the 0x application, Matcha, posted the following update on X (formerly Twitter): "Both 0x and Matcha continue to operate with no problem."

One CFTC commissioner cast a dissenting vote during the enforcement decision.

"The Commission’s Orders in these cases give no indication that customer funds have been misappropriated or that any market participants have been victimized by the DeFi protocols on which the Commission has unleashed its enforcement powers," said Commissioner Summer Mersinger in a statement. "I am concerned that the Commission in these cases is taking another step down the path of bringing enforcement actions when we should be engaging with the public."