Uniswap Labs Fined $175K by US CFTC as Part of Settlement
- Uniswap has already stopped trading the particular leveraged tokens that prompted the investigation.
- The SEC has charged Uniswap Labs of running an unlicensed securities exchange.
In a statement made public on September 4th, the Uniswap Labs, a developer of decentralized exchange (DEX), was charged by the US Commodity Futures Trading Commission (CFTC) with the unlawful sale of leveraged cryptocurrency trading to retail investors in the US.
As part of the settlement, Uniswap Labs complied with an order that the DeFi developer pay a $175,000 fine. And stop breaching the Commodity Exchange Act (CEA), according to the CFTC.
Regulation by Enforcement
Moreover, as digital asset platforms and DeFi ecosystems expand, the CEA will be actively enforced by the CFTCs enforcement division, according to a statement by Ian McGinley, director of enforcement for the CFTC. Also, operators of DeFi protocols must use extreme caution to prevent illegal activities, as per the Director.
In a statement on September 4th, one of the five commissioners of the CFTC, Summer Mersinger, voiced disapproval of the agencys approach to the enforcement action. Which the commissioner characterized as a regulation by enforcement.
Furthermore, Uniswap has already stopped trading the particular leveraged tokens that prompted the CFTC investigation, according to Mersinger. Also, among the tokens included in the CFTCs order from September 4th are the 2x Flexible Leverage Index tokens (BTC2XFLI) and ETH2XFLI, among others.
Index Coop, a DeFi protocol that focuses on leveraged yield strategies, seems to be the developer of the tokens. While the order doesnt specify who is issuing them.
Unlike spot commodity markets and securities, commodities derivatives products are regulated by the Commodity Futures Trading Commission (CFTC). The vast majority of digital assets are considered securities under US law, according to US SEC Chair Gary Gensler. The SEC has been charging Uniswap Labs of running an unlicensed securities exchange since April.
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Read more: https://thenewscrypto.com/uniswap-labs-fined-175k-by-us-cftc-as-part-of-settlement/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
