In a significant move, the CFTC issued Uniswap an order accusing the DEX of illegally offering leveraged or margined retail commodity transactions in digital assets via a decentralized digital asset trading protocol. The order requires Uniswap Labs to pay a $175,000 civil monetary penalty and to cease and desist from violating the Commodity Exchange Act [CEA], as charged.
“Today’s action demonstrates once again the Division of Enforcement will vigorously enforce the CEA as digital asset platforms and DeFi ecosystems evolve,” said Director of Enforcement Ian McGinley. “DeFi operators must be vigilant to ensure that transactions comply with the law.”
The prominent DEX platform has been under intense regulatory scrutiny for quite some time. Back in April, the SEC issued a Wells Notice to Uniswap indicating that the regulator was considering pursuing enforcement action against the trading platform. The move signaled the SEC’s crackdown against the DeFi industry.
Uniswap Survives Regulatory Storm: Expert Weighs In
Reacting to the CFTC’s order, crypto analyst Adam Cochran stated that while he believes the order is unfair and misguided, it is not a major setback for Uniswap. He noted that the DEX delisted the leveraged tokens after being alerted to the issue and paid a small settlement. Cochran also emphasized that the responsibility for ensuring compliance with regulations lies with the user, not the platform.
Although acknowledging that the CFTC’s order provides some clarity on the regulatory landscape for DeFi platforms, Cochran remained critical of the regulator’s approach saying, “While CFTC faulted Uniswap for displaying these to US users, they didn’t hold them criminally liable, didn’t argue they were an illegal futures exchange in and of itself. They were simply liable for offering/soliciting due to not restricting.”
CFTC’s action highlights the importance of compliance with existing laws and regulations. Meanwhile, the DEX’s native token UNI is currently retesting the $6.6 resistance level. A breakout above this could lead to targets of $7.45 and potentially $8.85. However, if the price fails to break through, support levels lie at $5.9 and between $4.6 – $3.8. The liquidation heatmap suggests minor selling pressure between $5.5 – $4.9 and significant selling pressure above $7.