Uniswap Labs Settles with CFTC after Violating Derivatives Trading Regulations

The price of Uniswap token UNI rose slightly after the news, jumping by 7% at the time of writing to trade around $6.46.

Uniswap Settles With CFTC Over Illegal Derivatives Trading Activities Bitcoin News

Uniswap Settles With CFTC Over Illegal Derivatives Trading Activities

The Commodity Futures Trading Commission has settled with decentralized exchange Uniswap after it found the platform to be in violation of derivatives trading regulations.

The price of UNI rose slightly following the news, trading at around $6.46 at the time of writing, up 7% on the day.

Uniswap Settles With CFTC Over Illegal Derivatives Trading Activities

According to the Commodity Futures Trading Commission (CFTC), decentralized exchange (DEX) Uniswap has settled with the regulator after it was found to have offered “illegal leveraged or margined trading to retail and institutional users.”

The CFTC stated that Uniswap offered the leveraged tokens through a digital asset protocol on the Ethereum blockchain, which provided “leveraged exposure to digital assets including Bitcoin and Ethereum.”

The regulator found that Uniswap failed to register the leveraged tokens with the CFTC, a violation of the Commodity Exchange Act (CEA). As a result, the CFTC has imposed a $175,000 civil penalty on the exchange.

However, the CFTC noted that Uniswap Labs “substantially cooperated” with the regulator's investigation, which led to the reduced penalty.

“Today’s action demonstrates once again the Division of Enforcement will vigorously enforce the CEA as digital asset platforms and DeFi ecosystems evolve,” said Director of Enforcement Ian McGinley. “DeFi operators must be vigilant to ensure that transactions comply with the law.”

The CFTC's settlement with Unisop comes amid a fresh wave of regulatory crackdowns by the U.S. Securities and Exchange Commission (SEC). While the CFTC has maintained that most cryptocurrencies are not securities, the SEC has taken the opposite view.

As part of its crackdown, the SEC has charged or issued Wells Notices to several crypto firms in recent months, including Consensys, Abra, Robinhood, and OpenSea.

The regulator is also engaged in lawsuits against crypto exchanges Binance, Coinbase, and Kraken.

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