Dan Berkovitz, commissioner of the US Commodity Futures Trading Commission (CFTC), believes unlicensed decentralized financial markets (DeFi) may be illegal in the United States.
According to him, DeFi markets for derivative instruments, which include futures contracts, may not be legal under the Commodity Exchange Act.
The Act requires that these products be traded only on regulated designated contract markets (DCMs). In particular, Berkovitz has said:
"DeFi markets, platforms, or websites are not registered as DCMs or SEFs [swap execution facilities]. The CEA does not contain any exception from registration for digital currencies, blockchains, or ‘smart contracts.'"
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In addition, he has pointed out DeFi markets do not have the same protections as centralized markets, so clients' funds are not protected.