Uniswap allowed illegal digital asset derivatives trading

Decentralized exchange Uniswap has settled with the Commodity Futures Trading Commission over illegal digital asset derivatives trading.

Uniswap Labs, the organization behind Ethereum’s (ETH) largest DEX, has been accused of illegally offering leveraged and margined retail commodity trading, according to a Sept. 4 CFTC notice.

The order acknowledged Uniswap’s “substantial cooperation” in the CFTC investigation, which led to a reduced civil penalty. As a result, Uniswap Labs agreed to pay a $175,000 fine.

The company will also cease and desist from violating the Commodity Exchange Act, meaning it will no longer be able to facilitate commodity futures contracts. Despite the news, Uniswap’s native token (UN) was up over 5% at press time.

UNI 24-hour price chart – September 4 | Source: crypto.news Uniswap faces second sanctions action

The CFTC’s settlement is the second enforcement action to shake up Uniswap’s legal department this year. In April, the web3 startup was served a Wells Notice by the U.S. Securities and Exchange Commission alleging federal violations.

Both operations may be part of a broader investigation by U.S. regulators into the decentralized finance and cryptocurrency sector, which SEC Chairman Gary Gensler has accused of non-compliance and widespread fraud.

Indeed, the CFTC confirmed in its complaint against Uniswap that the regulatory authority continues to focus on DeFi activities.

Industry voices also point to Operation Choke Point 2.0, which aims to remove crypto from the U.S. financial system and business economy.

In related news, the SEC criticized Ethereum-based NFT marketplace OpenSea for its Wells Memorandum. The document typically leads to a lawsuit, but it doesn’t guarantee the agency will take action. SEC prosecutors also accused crypto firm Galois of failing to maintain confidentiality and misleading investors.