CFTC Sanctions Uniswap Labs for Illegal Digital Asset Derivatives Trading
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The Commodity Futures Trading Commission (CFTC) has sanctioned Uniswap Labs, the company behind the popular decentralized trading platform Uniswap, for illegally offering leveraged and margined retail commodity transactions in digital assets.
The CFTC’s order, announced on Wednesday, mandates Uniswap Labs pay a $175,000 civil penalty and cease violating the Commodity Exchange Act (CEA).
This latest enforcement action is part of the ongoing regulatory efforts to regulate the decentralized finance (DeFi) space, and it is coming from all angles, from both the SEC and other similar agencies.
Dissenting Statement of @CFTCmersinger Regarding Settlement with Uniswap Labs: https://t.co/T8pqWyUbWr
According to the CFTC, Uniswap Labs developed and deployed a blockchain-based protocol on the Ethereum network.
This protocol allows users, including non-eligible Contract Participants and institutional investors in the U.S. and abroad, to trade digital assets through liquidity pools.
These pools consisted of matched pairs of digital assets valued against each other.
The platform’s user interface facilitated access to hundreds of these pools, including a limited selection of leveraged tokens that exposed users to the price movements of digital assets like Bitcoin (BTC) and Ether (ETH) with approximately 2:1 leverage.
The CFTC found that these leveraged tokens constituted margined or leveraged commodity transactions, which, by law, must be traded on a CFTC-registered contract market.
Uniswap Labs, however, was not registered as such, making its
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