US Commodities Regulator's Tech Advisory Panel To Review DeFi Amid Regulatory Push

A tech advisory panel of the U.S. Commodity Futures Trading Commission (CFTC) will review decentralized finance (DeFi) as the agency pushes to gain regulatory jurisdiction over cryptocurrencies.

"A discussion about DeFi, including cyber vulnerabilities, indicators of 'decentralization,' digital identity and unhosted wallets, will contribute to ongoing policy discussions in Washington, D.C. and beyond the beltway," CFTC Commissioner Christy Goldsmith Romero said in a press release Wednesday.

The CFTC Technology Advisory Committee (TAC) meeting will be held on March 22.

Decentralized finance refers to the sector established as an alternative to traditional finance. DeFi use cases have evolved over the years, including saving, investing and trading beyond traditional financial services.

The technology advisory committee will review "indicators and issues" related to decentralization, as well as "exploits and continuing vulnerabilities in crypto markets," according to the CFTC.

Executives from various crypto companies will be presenting during the panel review. Metrika Founder and CEO Nikos Andrikogiannopoulos; TRM Labs' head of legal and government affairs, Ari Redbord; Trail of Bits CEO Dan Guido and Fireblocks CEO Michael Shaulov are expected to attend the meeting.

The advisory panel will also consider a subcommittee on blockchain technology and cryptocurrency in what is deemed as a move to help the CFTC have regulatory jurisdiction over the crypto industry, Cointelegraph reported.

CFTC's Global Markets Advisory Committee (GMAC) last month discussed digital market assets and suggested the formation of subcommittees in the sector.

During the Feb. 13 meeting, Commissioner Caroline Pham said that while crypto markets were "truly borderless," policymakers should try to understand the industry so that policies do not "leave Americans behind and playing catch-up."

Last year, Pham said the current crypto environment was "a failure of risk management," adding that it was important to have the "right prudential regulation or minimum financial resource requirements and minimum standards for risk management in place," Protocol reported.

The CFTC has been trying to gain more regulatory control over the crypto industry. The Securities and Exchange Commission (SEC) is the "primary regulator" of crypto-assets.

In January, Commissioner Kristin Johnson urged Congress to give the CFTC expanded authority in regulating crypto firms. Johnson argued that lawmakers should adopt legislation that "closes the current gap in the oversight of crypto spot markets."

She said the existing regulatory frameworks such as anti-trust laws "may prove too limited in scope" in terms of appropriately regulating the crypto market. Like Pham, she also believes risk management controls are more effective solutions to prevent crypto-related crises.