On Jan. 8, a CFTC’s Committee of Advisors called on the regulatory body and the government to focus on DeFi to understand the workings of the decentralized finance market.
“From the time that I arrived at the CFTC, I have played a steady drumbeat that we need to study emerging issues related to digital assets, or we could risk harmful unintended consequences.”Christy Goldsmith Romero, CFTC Commissioner
To this end, the initiative’s authors have called on commissioners to generate a report that will help inform authorities on the state of DeFi.
The report states that the benefits and risks of defi largely depend on the design and features of specific systems. The main problem associated with DeFi systems is the lack of clear lines of responsibility and accountability, which should be avoided in some industry projects.
The publication will be a government advisory committee’s first report on the decentralized finance market.
In December 2023, CFTC Chairman Rostin Behnam stated that most digital assets can be considered commodities. He also acknowledged a turf war with the U.S. Securities and Exchange Commission (SEC) over the right to regulate the cryptocurrency industry.
Behnam acknowledged that a turf war between regulators is one of the main problems with regulating cryptocurrencies in America. In particular, it unfolded between the SEC and the CFTC. The departments cannot agree on which will hold the cryptocurrency sector.