The Commodity Futures Trading Commission (CFTC) is filing charges against the firm behind Uniswap (UNI), alleging that it offered illegal crypto derivatives contracts.
In a new press release, the regulatory agency says it has slapped Uniswap Labs with a $175,000 civil penalty and a cease and desist letter after it was allegedly found to be in violation of the Commodity Exchange Act (CEA).
According to the regulator, Uniswap Labs never properly registered as a contracts marketplace but was operating as if it did.
“Among the digital assets traded on the protocol and through the interface were a limited number of leveraged tokens, which provided users leveraged exposure to digital assets such as Ether and Bitcoin.
The order finds these leveraged tokens are leveraged or margined commodity transactions that did not result in actual delivery within 28 days and therefore can be offered to non-Eligible Contract Participants only on a board of trade that has been designated or registered by the CFTC as a contract market, which Uniswap Labs was not.”
Because Uniswap Labs was cooperative with the CFTC’s investigation, it was given a reduced monetary fine, according to the press release.
As stated by Ian McGinley, Director of Enforcement at the CFTC,
“Today’s action demonstrates once again the Division of Enforcement will vigorously enforce the CEA as digital asset platforms and DeFi ecosystems evolve. DeFi operators must be vigilant to ensure that transactions comply with the law.”
Earlier this year, the U.S. Securities and Exchange Commission (SEC) also sent a Wells Notice – a notice that the regulator plans to take enforcement actions – against the firm.
Uniswap is trading for $6.36 at time of writing, a 5% increase during the last 24 hours.
Generated Image: Midjourney