Decentralized exchange Uniswap has reached a settlement with the Commodity Futures Trading Commission over illegal trading of digital asset derivatives.
According to a September 4 CFTC notice, Uniswap Labs, the entity behind the largest ethereum (eth) DEX, was accused of illegally offering leveraged and margined retail commodity transactions.
The order acknowledged Uniswap’s “substantial cooperation” with the CFTC’s investigation, which led to a reduction of the civil penalty. As a result, Uniswap Labs agreed to pay $175,000 in fines.
The company will also no longer violate 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 more than 5% at press time.
Uniswap receives a second coercive measure
The CFTC settlement is the second enforcement action to hit Uniswap’s legal department this year. In April, the web3 startup received a notice from Wells from the U.S. Securities and Exchange Commission alleging federal violations.
Both crackdowns may be part of a broader investigation by U.S. watchdogs into decentralized finance and cryptocurrencies, a sector that SEC Chairman Gary Gensler has accused of widespread noncompliance and fraud.
In fact, the CFTC confirmed in its complaint that its action against Uniswap continued to focus on regulating DeFi activity.
Industry voices have also pointed to Operation Choke Point 2.0, which is designed to remove cryptocurrencies from the US financial system and corporate economy.
In related news, the SEC has slammed ethereum-based nft marketplace OpenSea with a Wells Notice. The document typically costs a lawsuit, but it doesn’t guarantee the agency will take action. SEC prosecutors also accused cryptocurrency firm Galois of custodial failures and misleading investors.