Home » Legislation » CFTC charges Uniswap Labs for illegal crypto derivatives trading, imposes $175,000 penalty
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Sep. 4, 2024
CFTC enforcement targets decentralized finance condo, penalizing Uniswap Labs for unregistered leveraged token offerings.
Key Takeaways
- CFTC fined Uniswap Labs $175,000 for illegally providing crypto derivatives trading.
- Uniswap Labs’ leveraged tokens were deemed unauthorized commodity transactions by the CFTC.
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The US Commodity Futures Trading Fee (CFTC) has issued an expose in opposition to Uniswap Labs for allegedly illegally providing crypto derivatives via tokens such as leveraged positions.
Per a CFTC statement, the alternate has been fined $175,000 and ordered to crash and desist from violating the Commodity Alternate Act.
The US regulator acknowledged that Uniswap Labs developed and deployed a blockchain-basically basically based digital asset protocol allowing customers to trade in liquidity swimming pools of digital property. The corporate’s web interface enabled salvage admission to to hundreds of these swimming pools, including leveraged tokens providing exposure to crypto esteem Ethereum (ETH) and Bitcoin (BTC).
The CFTC stumbled on these leveraged tokens to be commodity transactions that did no longer consequence in staunch offer inside 28 days. Such offerings to non-Eligible Contract Persons are easiest permissible on CFTC-registered contract markets, which Uniswap Labs used to be no longer, the statement added.
“As of late’s circulation demonstrates over once more the Division of Enforcement will vigorously implement the CEA as digital asset platforms and DeFi ecosystems evolve. DeFi operators ought to be vigilant to assemble definite transactions adjust to the laws,” Ian McGinley, Director of Enforcement at CFTC, acknowledged.
The CFTC acknowledged Uniswap Labs’ cooperation at some level of the investigation, ensuing in a diminished civil monetary penalty.
Regulatory stress in 2024
In April this year, Uniswap Labs obtained a Wells scrutinize from the US Securities and Alternate Fee (SEC). The regulator threatened enforcement circulation in opposition to the entity within the attend of the decentralized alternate, accusing it of providing unregistered securities.
On the occasion, Hayden Adams, CEO of Uniswap Labs, showed self perception that their operations are underneath regulatory compliance and that their work “is on the fitting side of history.”
Furthermore, he accused the SEC of letting “gross actors esteem FTX” go by whereas concentrated on appropriate actors, particularly Uniswap and Coinbase.
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