Crypto Trader’s Fraud Charges Show DeFi Isn’t Outside the Law

Criminal charges against a crypto trader who claimed to have walked away with about $50 million worth of digital assets after exploiting a decentralized finance platform show that even as DeFi remains mostly unregulated, it offers no shield against the legal consequences of alleged fraud.

“There’s a difference between what’s regulated and what’s legal,” Neal Kumar, partner at Willkie Farr & Gallagher LLP, said in a phone interview. “Just because it’s not regulated doesn’t mean that you could do any activity you want,” he added, and “government can still pursue fraud and manipulation.”

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