NEW YORK, Tuesday, September 10, 2024 – The Commodity Futures Trading Commission (CFTC) on September 4 issued an order against Uniswap Labs, charging the company with offering illegal digital asset derivatives trading.
The Delaware-based company, which operates out of New York, must pay a $175,000 fine and cease violating the Commodity Exchange Act (CEA), according to the CFTC.
Uniswap Labs facilitated the trading of leveraged or margined retail commodity transactions through a decentralized digital asset protocol. These transactions, involving digital assets such as Ether and Bitcoin, were conducted via the Ethereum blockchain, allowing users to trade in various liquidity pools. The company maintained a web interface that made these trades accessible to users. However, the CFTC determined that Uniswap Labs’ transactions did not comply with regulations as they were not offered through a registered contract market, as required by the CEA.
“This action demonstrates the CFTC’s commitment to enforcing compliance in the evolving DeFi space,” said Ian McGinley, Director of Enforcement at the CFTC. “DeFi operators must ensure transactions follow the law.”
The CFTC acknowledged Uniswap Labs’ cooperation during the investigation, resulting in a reduced penalty.
The CFTC continues to warn the public about dealing with unregistered companies. Customers are advised to check a company’s registration status before committing funds. The agency encourages reporting suspicious activities through its tip hotline or online.
Uniswap Labs’ case is part of a broader enforcement focus by the CFTC on ensuring compliance within the decentralized finance sector.
CFTC Announcement can be seen here.
