Uniswap Labs settled the allegations with the CFTC. The US regulator accused Uniswap of illegally offering leveraged trading. Protocol required a $175,000 fine.
Uniswap Labs, the parent company behind Ethereum's largest decentralized exchange, has settled allegations that it illegally allowed the trading of leveraged Bitcoin and Ether.
The company will pay a $175,000 penalty, according to the Commodity Futures Trading Commission. The regulator said the lower fine was imposed in recognition of Uniswap Labs' “significant contribution”.
In the settlement, Uniswab Labs neither confirmed nor denied the allegations, but admitted that it would not say anything to create “the impression that this order has no basis in fact.”
Uniswap's UNI token rose 5% on the news before reversing some of its gains on Wednesday.
Uniswap Labs is navigating the regulatory onslaught. Earlier this year, the company received a Wells notice from the Securities and Exchange Commission, warning that the agency was about to file an enforcement action.
And New York Attorney General Letitia James subpoenaed UniSwap Labs, the venture capital firms Andreessen Horowitz and Union Square Ventures that invested in CoinDesk. reported on wednesday
According to the CFTC, from 2021 to 2023, Uniswap Labs will allow users to buy and sell tokens that represent leveraged positions in Bitcoin and Ether.
It did so by creating a website that provided access to the Uniswap protocol, the regulator alleged.
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“During the relevant period, users of the interface transacted approximately $21.5 million in notional value in trades involving leveraged tokens,” the CFTC said.
Miles Jennings, general counsel at venture capital fund Andreessen Horowitz, praised the settlement in an X post.
“The simple lesson we should have learned already is to comply with the laws of the jurisdiction that facilitate your frontend behavior,” he said. wrote that.
“The CFTC focuses on regulating apps/frontends, not protocols. On businesses, not software. Good.”
Meanwhile, CFTC Commissioner Summer Mersinger, a frequent critic of the agency's crypto enforcement, faulted the decision to pursue Uniswap in the first place.
“With this settlement, the Commission appears to be taking responsibility for any DeFi platform that may be held responsible for any and all behavior that occurs within its protocol,” Mersinger wrote in a letter. Disagreement Advertisement
“Imagine if J. Edgar Hoover had held Henry Ford responsible for the crimes of John Dillinger and Bonnie and Clyde because the Ford V8 was central to their ability to commit crimes.”
In July, Uniswap Labs Announced It has removed tokens from its interface, citing an “evolving regulatory landscape”.
“Today's action proves once again that the Enforcement Division will aggressively enforce the CEA as digital asset platforms and DeFi ecosystems evolve,” CFTC's Director of Enforcement Ian McGinley said in a statement. “DeFi operators must be vigilant to ensure that transactions comply with the law.”
Uniswap Labs did not immediately return News' request for comment.
Alex Gilbert News'Diffie correspondent from New York. You can reach him at [email protected].
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