Key points
- The CFTC fined Uniswap Labs $175,000 for illegally offering crypto derivatives trading.
- The CFTC deemed Uniswap Labs’ leveraged tokens to be unauthorized commodity transactions.
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The US Commodity Futures Trading Commission (CFTC) has issued an order against Uniswap Labs for allegedly illegally offering crypto derivatives through tokens equivalent to leveraged positions.
According to the CFTC statementThe exchange has been fined $175,000 and ordered to cease and desist from violating the Commodity Exchange Act.
The US regulator said Uniswap Labs developed and implemented a blockchain-based digital asset protocol that allows users to trade in digital asset liquidity pools. The firm’s web interface allowed access to hundreds of these pools, including leveraged tokens that provide exposure to cryptocurrencies such as Ethereum (ETH) and Bitcoin (BTC).
The CFTC determined that these leveraged tokens were commodity transactions that did not result in actual delivery within 28 days. Such offerings to ineligible contract participants are only permitted on CFTC-registered contract exchanges, which was not the case with Uniswap Labs, the statement added.
“Today’s action once again demonstrates that the Division of Enforcement will vigorously enforce the CEA as digital asset platforms and DeFi ecosystems evolve. DeFi operators must remain vigilant to ensure transactions comply with the law,” said Ian McGinley, Director of Enforcement at the CFTC.
The CFTC acknowledged Uniswap Labs’ cooperation during the investigation, resulting in a reduced civil monetary penalty.
Regulatory pressure in 2024
In April of this year, Uniswap Labs received A notice from the U.S. Securities and Exchange Commission (SEC) on Wells. The regulator threatened to take enforcement action against the entity behind the decentralized exchange, accusing it of offering unregistered securities.
On the occasion, Hayden Adams, CEO of Uniswap Labs, presented confidence that their operations comply with regulations and that their work “is on the right side of history.”
He further accused the SEC of letting “bad actors like FTX” through while targeting good actors, namely Uniswap and Coinbase.
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