Uniswap Labs pays $175K to settle CFTC charges

Uniswap Labs has settled charges with the Commodity Futures Trading Commission (CFTC) that allege it violated the Commodity Exchange Act.

The settlement does not involve Uniswap admitting or denying the allegations contained within the order.

The order targets Uniswap Labs, citing its contributions to the protocol and providing an interface to use it. The protocol and interface were then supposedly used to trade tokens meant to represent “leveraged exposure to digital assets” such as ether and bitcoin.

The tokens in question are BTC2XFLI, ETH2XFLI, ETH2XFLI-P, BTC2XFLI-P, and oSQTH. These were issued by ‘Issuer 1,’ which seems to be Index.

The CFTC feels that both ether and bitcoin are commodities and that offering these assets through the interface Uniswap Labs created, without ensuring users were all eligible contract participants, is a violation of the Commodity Exchange Act.

The monetary penalty was reduced to this level in light of Uniswap Lab’s “substantial cooperation” and its “representations concerning its remediation.”

This fine represents 0.1% of the amount that Uniswap has raised, according to data from Crunchbase.

Uniswap received a Wells notice — now what?

CFTC Commissioner Summer Mersinger released a dissent to the order, claiming that this is an example of “regulation through enforcement” and calls for “notice-and-comment rulemaking.”

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