The Commodity Futures Trading Commission (CFTC) has issued an order against Uniswap Labs UNI/USDsettling charges related to illegal offerings of digital asset derivatives transactions.
The agency fined the Delaware-based company, which operates out of New York, $175,000. Uniswap was also issued a cease-and-desist notice for violating the Commodity Exchange Act (CEA).
The CFTC action It focuses on Uniswap Labs’ role in developing and implementing a blockchain-based digital asset protocol that enabled users, including ineligible contract participants, to trade leveraged tokens.
These tokens, which provide leveraged exposure to assets such as Ether Ethereum/USD and Bitcoin BTC/USDwere deemed to be leveraged or margined commodity transactions that did not comply with CFTC regulatory requirements.
At the heart of the problem is Uniswap Labs’ web interface, which facilitates access to hundreds of liquidity pools on the protocol.
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The CFTC found that offering these leveraged tokens to retail investors without proper registration as a contract exchange violated federal regulations.
This enforcement action follows previous regulatory scrutiny.
Earlier this year, Uniswap received a Wells notice from the Securities and Exchange Commission, which flagged potential additional regulatory action.
The company has yet to publicly respond to this latest CFTC order.
The CFTC’s decision to impose a relatively modest fine of $175,000 reflects Uniswap Labs’ “substantial cooperation” with the investigation, the order said.
As the digital asset industry continues to grapple with regulatory challenges, many are looking ahead to Benzinga's Future of Digital Assets event on November 19.
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