- CFTC issued a filing and settling charge against Uniswap Labs.
- The filing orders Uniswap Labs to pay $175,000 as a civil monetary penalty fee.
- Commissioner Summer Mersinger disagreed with the CFTC's charges, slamming the "regulation by enforcement" approach.
Uniswap Labs (UNI) received a $175,000 fine from the Commodity and Futures Trading Commission (CFTC) on Wednesday after the regulator issued a filing and settling charge against the decentralized exchange.
Uniswap Labs hit with $175,000 fine
Uniswap Labs, the team behind decentralized exchange (DEX) Uniswap, received an order from the CFTC accusing them of violating the Commodity Exchange Act (CEA). In a report on Wednesday, the CFTC alleged that Uniswap engaged in offering leveraged or margined retail commodity transactions using digital assets.
The regulator stated that Uniswap Labs permitted the trading of digital assets through hundreds of liquidity pools made available through a web platform. These liquidity pools provided exposure to leveraged assets such as Bitcoin (BTC) and Ethereum (ETH), which Uniswap Labs ought to have registered as contract markets with the CFTC.
Accordingly, Uniswap Labs is required to pay a civil monetary penalty fee of $175,000 and desist from violating the CEA. The report added that Uniswap Labs has been fully cooperative as they complied with the regulator's Division of Enforcement throughout the investigation.
Meanwhile, CFTC Commissioner Summer Mersinger argued against the regulator's actions, claiming that the case "has all the hallmarks of what we have come to know as regulation through enforcement."
Mersinger stated that the CFTC's charges against Uniswap Labs have little connection with the alleged offense. She went on to state that regulators need to start taking progressive approaches to violations rather than placing enforcement first.
"Using our enforcement authorities against DeFi protocols instead of providing clarity through notice-and-comment rulemaking risks driving responsible DeFi developers overseas to create businesses, jobs, and economic activity away from the United States," Mersinger stated.
Additionally, Mersinger added that the priorities for this case are misaligned. She claims that Uniswap did not act as a liquidity provider, collect trading fees, or extend credit. She also stated that no customers have been affected by the services provided nor labeled allegations of fraud against the DeFi protocol.
Uniswap Labs had previously announced that it received a Wells notice from the Securities and Exchange Commission (SEC) in April, in which the agency alleged that it may be facilitating the illegal trading of securities.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
![Bitcoin halving has failed to impact price, on-chain metrics highlight mixed signals](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_forex_XtraSmall.jpg)
Bitcoin halving has failed to impact price, on-chain metrics highlight mixed signals
Bitcoin (BTC) is facing its longest post-halving delay to a new all-time high as it trades around $58K on Wednesday. Unlike previous times, several supply overhangs in the past months and strong interest rates environment have heavily weighed on Bitcoin's price.
![Crypto exchange trading volume sees growth amid market decline](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptocurrenciesusd_XtraSmall.jpg)
Crypto exchange trading volume sees growth amid market decline
CCData released its monthly report on Wednesday, revealing that centralized exchanges witnessed significant surges in spot and derivatives trading volumes. Meanwhile, the CME experienced a decline in derivatives trading volumes, particularly in its ETH options and futures volume.
![Ethereum underperforms Nvidia, Bitcoin, Meta, others on risk-adjusted returns amid declining investor interest](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Ethereum/Ethereum_Coins_31_03_XtraSmall.jpg)
Ethereum underperforms Nvidia, Bitcoin, Meta, others on risk-adjusted returns amid declining investor interest
Ethereum (ETH) is up 0.1% on Wednesday following increased outflows and declining trading volume across ETH products. This follows key data showing ETH's recent underperformance compared to other top assets.
![Uniswap Labs fined by CFTC following allegations of offering illegal crypto derivative services](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Uniswap/uniswap-150x150logo-637399982744667692_XtraSmall.png)
Uniswap Labs fined by CFTC following allegations of offering illegal crypto derivative services
Uniswap Labs (UNI) received a $175,000 fine from the Commodity and Futures Trading Commission (CFTC) on Wednesday after the regulator issued a filing and settling charge against the decentralized exchange.
![Bitcoin: Will BTC continue its ongoing decline?](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_5_XtraSmall.jpg)
Bitcoin: Will BTC continue its ongoing decline?
Bitcoin (BTC) trades above $59,000 on Friday, but it has lost 7.5% this week so far after being rejected around the daily resistance of $65,000. The decline is supported by lower demand from the US spot Bitcoin ETFs, which registered a net outflow of $103.8 million, falling Bitcoin's Coinbase Premium Index, and a spike in Network Realized Profit/Loss.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.