Categories: DeFi

Uniswap Suddenly Blocks Trading Of Derivative Tokens And Hot Memecoins

Key Points:

Uniswap was discovered by DeFi users blocking some memecoins and derivatives.
Many speculate that the reason the DEX maintains this block list is to avoid legal risks in the US.

DeFi users uncovered the Uniswap DEX exchange, which was banning various memecoins and derivative cryptocurrencies.

Numerous cryptocurrency users have reported that they can no longer trade memecoin Ben (BEN) on Uniswap, the biggest decentralized exchange (DEX) in the cryptocurrency business today.

Nevertheless, only the DEX website interface (frontend) prevents users from transacting, and it is still possible to connect to the token’s smart contract for conventional transactions.

Memecoins such as Ben (BEN), Grump Cat (GRUMP), Gucci (GUCCI),… are among the tokens censored by the DEX, as are some cryptocurrencies impersonating projects such as DYDX and ENS DAO, and, most notably, a series of derivative tokens from both major coins such as BTC, ETH, and real-life asset and stock indices.

Despite this, several investors chastised Uniswap for barring “hot” memecoins like BEN when there was no legal concern. Others even say that the DEX is antithetical to the platform’s decentralized nature. On May 8, BEN rewarded its early investors with a more than 5,000% one-day increase, driven by an endorsement from crypto celebrity Ben Armstrong, who eventually bought up ben.eth for an undisclosed price.

Ben Armstrong

Many assume that Uniswap keeps this block list in order to avoid legal problems in the United States, where the Exchange registered the firm. The US financial authorities, particularly the Securities and Exchange Commission (SEC), have repeatedly pursued legal action against various cryptocurrency initiatives in the past, claiming that securities are being utilized. As a result, it’s reasonable that the DEX aggressively prohibits derivative tokens linked to the US stock market.

Uniswap and several DeFi programs, such as Balancer and Aave, have already prohibited addresses associated with Tornado Cash, the Ethereum trading mixer site blacklisted by the US Department of Justice. Users from sanctioned countries are barred from using OpenSea and Infura.

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Harold

Coincu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.