UNI Price Rockets As CFTC Slaps Uniswap Labs With $175K Settlement Fine

The UNI price surged more than 8% today, before witnessing a slight retreat after the US CFTC slapped Uniswap Labs with a settlement fine. In a recent update, the US Commodity Futures Trading Commission (CFTC) has issued an order against the firm for illegal digital assets derivatives trading. According to the filing, the crypto firm is required to $175,000 in penalty to settle the regulatory charges.

CFTC Cracks Down On Uniswap Labs

The CFTC has issued an order against Uniswap Labs in a recent enforcement action. According to the filing, the regulators accused the firm of facilitating illegal leveraged and margined retail commodity transactions through its decentralized trading protocol.

Meanwhile, the agency claimed that the company, under the name Universal Navigation Inc., enabled the trading of digital assets through liquidity pools without complying with crucial guidelines.

According to the CFTC, the trading protocol offered users exposure to leveraged digital assets, including tokens linked to Bitcoin and Ether. These transactions did not meet the 28-day delivery requirement and were therefore deemed non-compliant with existing laws governing commodity transactions. The regulator stressed that such trades should only occur on a recognized and registered board of trade, which Uniswap Labs is not.

CFTC claimed that the trading protocol offered users exposure to leveraged digital assets, including crypto like Bitcoin and Ethereum. These transactions, as per the report, didn’t meet the 28-day delivery requirement and were therefore deemed non-compliant with the existing regulations of the commodity transactions,

The agency said that such trades should only occur on a recognized as well as registered board of trade, which the firm is not. Notably, Director of Enforcement Ian McGinley highlighted the importance of compliance in the evolving DeFi landscape. He stated, “DeFi operators must ensure transactions comply with the law.”

Meanwhile, the settlement underscores the CFTC’s firm stance on enforcing the Commodity Exchange Act (CEA) within the rapidly changing digital asset sector.

UNI Price Soars Amid Market Optimism

Commenting on the matter, the firm’s CLO Katherine Minarik stated that the issue concerned a small percentage of trading activity involving a few tokens. The settlement, a standard “no admit-no deny” agreement, resolves the matter.

She also highlighted that the firm is now relieved to move forward, focusing on developing the DeFi space. In other words, the firm, as per the CLO, views this CFTC development as a minor setback, having put the issue behind them.

Meanwhile, the company has cooperated with the investigation, leading to a reduced penalty of $175,000. According to the report, the CFTC acknowledged the firm’s significant collaboration, which played a role in mitigating the consequences. However, Uniswap Labs has been ordered to cease any activities that violate the Commodity Exchange Act (CEA) moving forward.

The market also lauded the development, as evidenced by the surge in the crypto’s price. During writing, UNI price soared 7% to $6.46, after hitting a 24-hour high of $6.62. Notably, its trading volume also skyrocketed 145% to $259.48 million.

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Rupam Roy

Rupam, a seasoned professional with 3 years in the financial market, has honed his skills as a meticulous research analyst and insightful journalist. He finds joy in exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond conventional boundaries. His contributions encompass breaking stories, delving into AI-related developments, providing real-time crypto market updates, and presenting insightful economic news. Rupam’s journey is marked by a passion for unraveling the intricacies of finance and delivering impactful stories that resonate with a diverse audience.

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