How the BitMEX lawsuit from the CFTC could have a negative impact on DeFi 

Quick take

1.5 minute read

• The most interesting news piece of this week is the criminal charges struck against the BitMEX crypto exchange and the aftermath of the event. 

• In case you’ve been living under a rock these past few hours, the United States commodity futures trading commission (CFTC) announced charges against three executives from the BitMEX exchange.

The most interesting news piece of this week is the criminal charges struck against the BitMEX crypto exchange and the aftermath of the event. In case you’ve been living under a rock these past few hours, the United States commodity futures trading commission (CFTC) announced charges against three executives from the BitMEX exchange. This is due to violating the bank secrecy act and the weak anti-money-laundering policies that they implement.

In the backlash of this news, the crypto community is debating whether the world of decentralised finance (DeFi) is prepared to face such scrutiny from High Up regulators.

These kinds of protocols have been booming over the course of this year but the argument has been raised as to whether DeFi and decentralised exchanges (DEX) even need to comply with the rules integrated from the bank of secrecy act.

Adam Cochran, a partner at Cinneamhain ventures, as well as a plethora of other roles, took to Twitter following the news breaking on the exchange and its lawsuit with a CFTC explaining why the news is bad for decentralised finance as well as centralised finance.

In the Twitter thread that was 25 tweets long, he explained but even though lawmakers and authorities cannot directly shut down or close any DEXs, regulators could address the core developers of these platforms and go from there.

15/25

The only thing that the BSA cares about is not if you are in the US or if you are a corporate entity, it cares about are you a "financial agency" which can include a person, issuer, redeemer, exchanger, entity, depository trustee or agent, or a collection of such persons

— Adam Cochran (@AdamScochran) October 1, 2020

You can see the full Twitter thread here.

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