Uniswap hit with CFTC order over illegal crypto derivatives trading
- Uniswap hit with order by CFTC for illegal trading in digital asset derivatives
- The decentralized exchange will pay $175,000 in civil monetary penalty and is also ordered to cease and desist from the illegal offerings.
Uniswap has settled with the Commodity Futures Trading Commission after the regulator found the decentralized exchange had violated derivatives trading regulations. However, the DEX platform has settled with the regulator, agreeing to pay a penalty.
The price of Uniswap token UNI rose slightly after the news, jumping by 7% at the time of writing to trade around $6.46.
CFTC hits Uniswap with $175,000 penalty
According to the CFTC, Uniswap illegally offered access to leveraged or margined trading to retail and institutional users via a digital asset protocol on the Ethereum blockchain. The leveraged tokens on Uniswap offered access to leveraged exposure to digital assets including Bitcoin and Ethereum.
The regulator thus found the platform to have violated the Commodity Exchange Act, and has imposed a $175,000 civil penalty against the exchange.
Commenting on the penalty, CFTC said it is a reflection of the “substantial cooperation” that Uniswap Labs showed amid the regulator’s investigation.
CFTC has, however, issued a cease and desist order against Uniswap Labs.
“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.”
CFTC’s settlement with Uniswap comes amid a fresh wave of regulatory crackdown by the US Securities and Exchange Commission. While the CFTC has said most cryptocurrencies are not securities , the SEC has taken the opposite view.
In this case, SEC has charged or issued Wells Notices to multiple crypto firms in recent months, including Consensys, Abra, Robinhood and OpenSea .
The regulator also has lawsuits against crypto exchanges Binance, Coinbase and Kraken.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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