Coinbase CEO Brian Armstrong vehemently opposes the United States Commodity Futures Trading Commission (CFTC) taking legal action against decentralized finance (DeFi) protocols. Armstrong is concerned about the potential loss of industry strength for the nation.
Armstrong urges DeFi protocols not to settle and instead, to pursue these cases in court to set a precedent, as he contends that the claims lack substance.
Brian Armstrong: CFTC Action May Hamper US Economy
In a statement posted on X (formerly Twitter) on September 13, Armstrong states it is unlikely the CFTC can take action against DeFi protocols
“These are not financial service businesses, and it’s highly unlikely the Commodity Exchange Act even applies to them.”
Armstrong states that his hope “is these DeFi protocols take these cases to court to establish precedent.” He noted the court’s ability to make an unbiased stance towards the industry. “The courts have proven to be very willing to uphold rule of law,” Armstrong stated.
Armstrong cautions that heightened enforcement efforts could potentially drive the DeFi industry to relocate offshore.
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Most of Armstrong’s followers agreed with him in their comments. However, some raised doubts about the feasibility of pursuing a battle over settlement with the US regulator.
“A lot of the projects don’t have funds to fight the SEC and end up having to settle,” the user stated. Another suggested that more support should be given through a dedicated fund. “How about set up a legal defense fund for small projects?” the user asked.
This is a developing story.
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