Uniswap Faces Regulatory Heat

Uniswap needs help to emerge from the scrutiny of US regulators. When it comes to crypto, New York State Attorney General Letitia James seems to be following in the footsteps of SEC chairperson Gary Gensler.

Some venture capital firms that invested in Uniswap received summonses from James' office the previous month. a16z also received such subpoenas.

Uniswap is one of many crypto projects Letitia is targeting. She has previously targeted various crypto firms, such as CoinEx, KuCoin, and Genesis.

Various regulators are putting heat on Uniswap. On September 4, the decentralized finance giant Uniswap received an order from the CFTC to pay a fine of $175,000 as a civil monetary penalty.

This penalty came with the orders to cease violating the Commodity Exchange Act. Authorities have charged Uniswap with offering illegal leveraged and margin commodities transactions.

According to the CFTC, Uniswap's platform allows its users to trade in pairs that are not created by the platform itself, exposing investors to high risk. Uniswap has not registered as a designated contract market with the CFTC and cannot offer leveraged trading products.

SEC's Wells Notice

Along with the CFTC and NYAG, Uniswap is already in trouble with the SEC. In April this year, the platform received a Wells Notice from the Securities and Exchange Commission.

Uniswap's COO, Mary Catherin, shared information on this step with the SEC. She said the Wells notice centered on Uniswap operating as an unregistered securities broker and exchange. However, it is still uncertain if Uniswap's native token, UNI, was identified as a potential security in the SEC's notice.

The crypto ecosystem has been waiting for clear regulations for a long time.

The projects and the investors are suffering the wrath of various regulatory bodies. Even though none of them have clear guidance on how crypto projects should work, US regulatory authorities have been targeting the crypto industry for a long time. From Ripple to Coinbase and now Uniswap, all are punished without clear guidelines.

These actions and penalties have increased, especially after the collapse of FTX. The crypto community is now looking at the presidential elections in November in hope. Everybody hopes that the results of these elections might give rise to a crypto-favorable government.