Decentralized exchange Uniswaps’ native token, UNI, is on a bullish rampage today following a historic settlement with the US Commodity Futures Trading Commission (CFTC). The spike in the token comes amid a pessimistic outlook in the crypto market, suggesting renewed confidence in the exchange.
Details of Uniswap and the CFTC Settlement
The CFTC issued an order filing and settling charges against Uniswap, per a notice released earlier today. Specifically, the CFTC asked Uniswap to pay a $175,000 civil monetary penalty charge.
It also asked the exchange to cease and desist from violating the Commodity Exchange Act (CEA), as charged. This means the DEX startup can no longer facilitate future commodity contracts.
The order acknowledged Uniswap’s “substantial cooperation” with the CFTC’s investigation. The commodities regulator advised the public to verify a company’s registration before investing.
The case between Uniswap and the CFTC centers around illegal digital asset derivatives trading. Uniswap was accused of unlawfully offering leveraged and margined retail commodity transactions.
The CFTC said Uniswap developed and maintained a web interface allowing users to trade cryptocurrencies. These include cryptocurrencies developed by third parties, exposing investors to margined or leveraged returns against Bitcoin and Ethereum prices.
Commenting on the settlement, Director of Enforcement Ian McGinley stated,
“DeFi operators must be vigilant to ensure that transactions comply with the law. Today’s action demonstrates that the Division of Enforcement will again vigorously enforce the CEA as digital asset platforms and DeFi ecosystems evolve.”
UNI’s Price Reaction
Uniswap’s settlement with the CFTC quickly sparked a bullish momentum on the price of UNI.
After weeks of performing terribly, UNI’s price has recovered sharply, potentially eyeing its highest level. By market capitalization, UNI has now eclipsed Kaspa (KAS) to become the 21st-largest cryptocurrency. While UNI’s market capitalization is $3.82 billion, KAS comes behind with $3.8 billion.
As of this writing, UNI’s price was trading at $6.4, demonstrating a 7.5% increase in the past 24 hours and an 11% surge in the past week. The trading volume increased by 150% to $261 million, indicating renewed investor interest.
Based on technical analysis, UNI might soon revisit the 20-day Exponential Moving Average (EMA), a sign of further price increases. Market analysts think Uniswap’s price could reach $7 soon if demand for the cryptocurrency is sustained.
Is Uniswap and SEC Settlement Next?
The CFTC’s case is the second legal action to rock Uniswap this year. In April, the U.S. Securities and Exchange Commission (SEC) served the decentralized exchange a Wells Notice alleging federal violations.
However, Uniswap hit back at the SEC’s legal arguments as “weak” and said it was ready for the battle in court. The SEC and CFTC legal actions may be part of a broader inquiry into Decentralized Finance (DeFi) and cryptocurrencies.
Meanwhile, SEC chair Gary Gensler has consistently accused the sector of non-compliance and widespread fraud. Now that Uniswap has settled with the CFTC, market participants will watch to see if an SEC settlement will follow in case of legal escalation.
⚠️Disclaimer
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.
