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Learning & News => News related to Crypto => Topic started by: TomPluz on September 05, 2024, 06:35:56 AM

Title: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: TomPluz on September 05, 2024, 06:35:56 AM
(https://images.cointelegraph.com/cdn-cgi/image/format=auto,onerror=redirect,quality=90,width=717/https://s3.cointelegraph.com/uploads/2024-09/0191bdda-0283-7925-9fa2-ccd55703d1ff)

Quote
The United States Commodity Futures Trading Commission (CFTC) charged decentralized exchange (DEX) developer Uniswap Labs with illegally offering leveraged cryptocurrency trading to US retail investors, according to a Sept. 4 announcement.

The CFTC said Uniswap Labs agreed to settle the charges by paying a $175,000 civil penalty and by agreeing to cease violating the Commodity Exchange Act (CEA).

Summer Mersinger, one of the CFTC’s five commissioners, objected to the CFTC’s handling of the enforcement action in a Sept. 4 statement criticizing the agency for what Mersinger described as “regulation through enforcement.”

“It was my hope that one day soon the commission would consider rulemaking, or at the very least guidance, making clear how DeFi protocols could comply with them,” Mersinger said. “Unfortunately, today is not that day.”

This is not a surprising news on the move of CFTC to charge Uniswap and then later on settle with it for the $175,000 amount which is not a lot actually compared to what other crypto-based platforms paid in the past for their cases.

What I am noticing is the dissenting opinion of one of the commissioners named Summer Mersinger who criticized what she called as "regulation through enforcement" and made the strong point that the commission should be doing rulemaking and guidance to the crypto market players.

And I think that the lady has a strong point...and we would not be on a quandary right now if the commission and SEC for that matter is actually doing its job the way it should have.

Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: Z-tight on September 05, 2024, 08:56:19 AM
This is what the sec, cftc and the doj do, they charge crypto services with a breach of their laws and settle with them for a huge amount of money. $175,000 is not a lot for this service, so they are either lucky or the charges against them does not carry that much weight to settle with anything larger than that.

I also agree with Mersinger, no clear rules or guidance, seems they are happy this way, charging the services rather than guiding them on what is accepted and what's not.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: NotATether on September 05, 2024, 01:27:21 PM
I'm guessing that now they are going to have to be collecting IP address data of all its visitors and then apply geoblocking to prevent people from accessing the leverage feature OR since that would mean people would just change their country since there is no KYC procedure, they would just rip out the whole leveraged trading feature for everyone.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: MrSpasybo on September 05, 2024, 07:11:30 PM
Quote from: Z-tight on September 05, 2024, 08:56:19 AM
This is what the sec, cftc and the doj do, they charge crypto services with a breach of their laws and settle with them for a huge amount of money. $175,000 is not a lot for this service, so they are either lucky or the charges against them does not carry that much weight to settle with anything larger than that.

I also agree with Mersinger, no clear rules or guidance, seems they are happy this way, charging the services rather than guiding them on what is accepted and what's not.
It's unfortunate that we're still in a gray area regarding the legal framework for crypto. The SEC has accused many crypto companies but there are no clear regulations or guidelines for them to follow. This is similar to a driver being fined but the police can't explain what driver did wrong or how to do it right ^^

$175K is not a big fine for UniSwap financial capacity, but this event may negatively impact the current development of DeFi. At least, DEX developers now have more experience to avoid legal troubles in this bullrun.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: Zed0X on September 05, 2024, 11:43:55 PM
Any business that's doing well would probably take that $175K penalty all day just to get rid of the problem as quickly as possible. It's not worth refusing the fine and dragging the case for a long time.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: Captain Corporate on September 06, 2024, 12:18:27 AM
Congrats to that person for saying what everyone was thinking. I mean if there aren't really that many rules and regulations for a place like uniswap, then punishing them for it makes no sense. Obviously 175k is nothing for Uniswap, they probably made tens of millions of dollars from it, but the reality is that its still not reasonable to fine them for something that doesn't even exist. They pull rules out of other places that would apply here, but not directly a rule for market making in the crypto world for a place like uniswap exists in the law so far. I would guess this could be an example moving forward at the very least.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: yhiaali3 on September 06, 2024, 05:07:49 AM
Indeed, Ms. Summer Mersinger raised a very important point, which is that the CFTC or SEC should do its job by setting rules and guiding players in the crypto market, not just blackmailing them into paying fines!!

This is what the work of the two committees should actually be, setting rules and guiding companies to comply with the laws and protect users' rights, through the way the two committees work, I feel like we have a mafia here whose only job is to legally blackmail companies into paying fines. :-X
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: MrSpasybo on September 06, 2024, 06:59:00 PM
Quote from: yhiaali3 on September 06, 2024, 05:07:49 AM
Indeed, Ms. Summer Mersinger raised a very important point, which is that the CFTC or SEC should do its job by setting rules and guiding players in the crypto market, not just blackmailing them into paying fines!!

This is what the work of the two committees should actually be, setting rules and guiding companies to comply with the laws and protect users' rights, through the way the two committees work, I feel like we have a mafia here whose only job is to legally blackmail companies into paying fines. :-X
We can consider this as the cost of driving innovation and helping the crypto market achieve a more formal legal framework sooner. Everything might become more positive after the US election and the new Congress will accept and support the development of crypto instead of continuously attacking and fining crypto companies.

Such lawsuits cannot make the crypto community afraid, they only make us more united, focused on the future, and protect our financial freedom. I hope the DeFi boom in the coming months will be the clearest evidence for this!
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: Captain Corporate on September 06, 2024, 08:50:09 PM
I agree that 175k is nothing compared to what this opens up, but I still put the emphasis on that woman, I think that's what we should get from this. Its not only that she is right, but also the fact that it shows we have people on our side as well. Which means that we could definitely end up with a good result if we know what we are dealing with. So if we could support these kind of people in government, in every position, no matter how small or big, then we could definitely get better and more likely supportive comments like this as well. After all uniswap didn't had any regulations to follow, so she is right, and we should show her our support.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: yhiaali3 on September 07, 2024, 11:42:39 AM
Quote from: MrSpasybo on September 06, 2024, 06:59:00 PM
We can consider this as the cost of driving innovation and helping the crypto market achieve a more formal legal framework sooner. Everything might become more positive after the US election and the new Congress will accept and support the development of crypto instead of continuously attacking and fining crypto companies.
Yes I agree, we can see what is happening as a cost to innovation and help the crypto market achieve a more formal legal framework especially with the upcoming presidential elections in which Trump is expected to win and will likely change the entire team.

Hopefully the new Congress and the new President will be more open to Bitcoin and crypto and do their work to open up and enact new legislation that gives more freedom to crypto companies. I expect we will see very big changes if Trump wins.
Title: Re: Uniswap settled with CFTC on charge of illegal derivatives trading
Post by: sagarmota10 on September 07, 2024, 12:41:48 PM
Despite this charge, uni price is not affected that much.
Even BTC dump from 65k to 54k but uni hold its value better, Thus I think when market stablise at above level after week uni price can pump hard.