In a recent announcement, Summer Mersinger, Commissioner of the United States Commodity Futures Trading Commission (CFTC), voiced her apprehension regarding the agency's contemplation of enforcement measures concerning decentralized finance (DeFi) protocols, emphasizing the need for a more inclusive approach.
Mersinger conveyed reservations about the CFTC's current strategy in these matters, contending that enforcement actions may not be the most appropriate avenue for dealing with the innovative DeFi technology. Instead, the Commissioner advocated for the CFTC to actively engage with the public and stakeholders by utilizing rulemaking and other regulatory tools, rather than predominantly resorting to enforcement actions, stating:
“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.”
Mersinger affirmed a readiness to apply the Commodity Exchange Act and CFTC rules, particularly to shield market participants from fraud and abuse, as mandated by Congress. However, she noted that recent CFTC orders in these cases didn't point to any misuse of customer funds or harm to market players by the DeFi protocols facing enforcement.
The commissioner posed essential questions about the regulatory jurisdiction over DeFi protocols, the necessity for clear rules, and the potential consequences of enforcement without transparent rulemaking. Notably, the CFTC's spring 2023 regulatory agenda lacks initiatives focused on DeFi rulemaking, leaving these critical issues largely unaddressed.