Identity

As decentralized finance (DeFi) gains momentum and undergoes changes, a subcommittee of the Commodity Futures Trading Commission (CFTC) voted in a meeting to propose <a href="https://www.cftc.gov/media/10106/TAC_DeFiReport010824/download" rel="noopener noreferrer nofollow">recommendations</a> for the industry. The first-of-its-kind report signals a significant leap towards policy making for the DeFi sector, ensuring that regulators and industry stakeholders stay updated.
Interestingly, the report from the Technology Advisory Committee (TAC) of the CFTC focused on both the “promising opportunities and complex, significant risks” of DeFi.
<h2 id="b-details-of-the-cftc-report-b">Details of the CFTC Report</h2>
The main idea conveyed in this report emphasizes the need for collaborative efforts between the government and industry. However, actions should be taken to work together across regulatory and strategic initiatives, promoting a better understanding of DeFi and facilitating its responsible and compliant development.
Additionally, the report suggests enhancing technical capabilities for policymakers, improving data collection, examining current regulatory boundaries, pinpointing risks, and assessing various regulatory options. Likewise, the report encourages closer collaboration with DeFi developers and prioritizes advancements in digital identity and other technologies to promote privacy and security in the decentralized domain.
<h2 id="b-cftc-advocate-for-defi-identity-b">CFTC Advocate for DeFi Identity</h2>
According to CFTC Commissioner Christy Goldsmith Romero, who sponsored the committee, the absence and intentional avoidance of transparent lines of responsibility and accountability in certain industry designs is one major concern for DeFi.
Therefore, the report urges policymakers to pinpoint and prioritize projects with the highest concerns. It emphasizes the importance of concentrating on digital identity, Know Your Customer (KYC), and Anti-Money Laundering (AML) regimes, along with fine-tuning privacy calibration in the DeFi space.
Interestingly, the CFTC’s recommendations build on a similar report from the Department of Treasury addressing the risks of illicit financing within the DeFi ecosystem. The report suggested enhancing collaboration between federal regulatory bodies and industry stakeholders.
<h2 id="b-cftc-takes-action-against-defi-protocol-b">CFTC Takes Action Against DeFi Protocol</h2>
In September 2023, <a href="https://thecoinrise.com/cftc-cracks-down-on-operations-of-3-defi-protocols/" rel="noopener noreferrer nofollow">the commission carried out enforcement actions against Opyn, ZeroEx, and DeridEx</a> for providing unauthorized leveraged and margin retail commodities transactions in digital assets. The protocols were fined $250,000, $200,000, and $100,000 respectively for violating the rules laid down by the CFTC and the Commodity Exchange Act.
The post <a href="https://thecoinrise.com/cftc-subcommittee-makes-recommendations-for-the-defi-sector/" rel="noopener noreferrer nofollow">CFTC Subcommittee Makes Recommendations For the DeFi Sector</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

CFTC Subcommittee Makes Recommendations For the DeFi Sector

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