Uniswap Labs Settlement With CFTC Completes $175,000 Fine

Key Points:

• Uniswap Labs settlement was issued a $175,000 fine for violations of the Commodity Exchange Act alleged by the CFTC.
• The company was found to have offered transactions to users without proper designation as a contract market.

The Uniswap Labs settlement on violations of DeFi trading has now been finalized with the CFTC.

Read more: Uniswap Fiat Services Now Boosted With Transak Support

Uniswap Labs Settlement Completed With $175,000

Today’s order by the CFTC finds that Uniswap Labs offered illegal leveraged or margined retail commodity transactions in digital assets through a blockchain-based trading protocol. Under the Uniswap Labs settlement, the firm is ordered to pay a $175,000 civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act.

Uniswap Labs developed a protocol where users could trade digital assets over the Ethereum blockchain. It supported access to hundreds of liquidity pools that, in turn, contained leveraged tokens. This class of tokens gave users amplified exposure to such assets as Ether and Bitcoin.

Uniswap Labs and Recent Legal Issues

The CFTC order underlines that these leveraged transactions not actually delivered within 28 days can be lawfully offered only to eligible contract participants on a designated or registered board of trade, a status Uniswap Labs did not have.

The CFTC praised the substantial cooperation by Uniswap Labs during the investigation, which had a reducing effect on the civil penalty. 

There’s also the possibility of an enforcement action from the Securities and Exchange Commission hanging over Uniswap Labs. In April, the agency doled out a Wells Notice, a nod that the agency intends to file a lawsuit against the company. Since then, Uniswap Labs has argued its case with the SEC in hopes it won’t further push action.