According to TechFlow, on September 4, the U.S. Commodity Futures Trading Commission (CFTC) issued a penalty order against Uniswap Labs, accusing it of illegally providing leveraged or margin retail commodity trading through decentralized digital asset trading protocols. Uniswap Labs was required to pay a civil penalty of $175,000 and stop violating the Commodity Exchange Act (CEA).

Ian McGinley, director of the CFTC’s enforcement division, said the action once again demonstrated that the department will strictly enforce the CEA in response to the development of digital asset platforms and the DeFi ecosystem. He stressed that DeFi operators must remain vigilant to ensure that transactions comply with legal regulations.

Uniswap Labs develops and deploys a blockchain-based digital asset protocol that allows non-qualified contract participants and institutional users in and outside the United States to trade digital assets through the Ethereum blockchain. The protocol also provides trading in a limited number of leveraged tokens that are identified by the CFTC as leveraged or margined commodity transactions and are not physically delivered within 28 days.