The US Commodity Futures Trading Commission (CFTC) has reached a settlement with Uniswap Labs, fining the decentralized crypto exchange $175,000 for allegedly offering illegal leveraged retail trading in digital assets. Uniswap Labs, operating under Universal Navigation Inc., has been ordered to cease any further violations of the Commodity Exchange Act (CEA).
Uniswap’s decentralized finance (DeFi) platform enables users to trade digital assets, including leveraged tokens, without intermediaries. The CFTC claimed that the trades involved leveraged or margined commodities, which can only be legally offered on CFTC-designated contract markets, a designation Uniswap Labs lacked. The fine was reduced in recognition of Uniswap Labs’ cooperation during the investigation.
Ian McGinley, the CFTC’s Director of Enforcement, emphasized the agency’s commitment to enforcing the CEA as digital asset platforms and DeFi ecosystems evolve, warning DeFi operators to ensure their transactions comply with the law. Uniswap’s Chief Legal Officer, Katherine Minarik, noted that the investigation involved only a small fraction of trades and stated that the settlement did not include an admission or denial of the CFTC’s findings. She reiterated Uniswap’s focus on advancing DeFi for everyone.
CFTC Commissioners Summer Mersinger and Caroline Pham expressed dissenting opinions. Mersinger criticized the settlement as “regulation through enforcement,” pointing out that Uniswap had already blocked the trading of the tokens in question. She argued that the settlement only serves to highlight the costs imposed on DeFi projects attempting to comply with CEA regulations.
Earlier this year, Uniswap received a Wells notice from the Securities and Exchange Commission (SEC), signaling potential action against the company. Both the SEC and CFTC have targeted centralized exchanges like Binance and decentralized crypto projects that utilize automated software. The crypto industry continues to call for clearer guidelines from Congress to prevent stifling innovation in the US, while opponents argue that compliance with existing laws is necessary.
