The Commodity Futures Trading Commission (CFTC) issued an order to file and settle charges against Unisawp Labs for offering illegal digital asset derivatives trading. The order results in Uniswap paying a $175,000 fine, and to cease and desist from violating the Commodity Exchange Act (CEA). According to the CFTC, Uniswap Labs violated the CEA as it “developed and maintained a web interface that it made available to users,” that “provided users leveraged exposure to digital assets such as Ether and Bitcoin.” These leveraged tokens did not result in delivery within 28 days, which means they can only be offered on a board of trade that is designated or registered with the CFTC via a contract market, which Uniswap Labs is not. The order cited leveraged digital assets including Index Coop’s BTC 2x Flexible Leverage Index token (BTC2XFLI) and ETH 2x Flexible Leverage Index Token (ETH2XFLI) as two examples of tokens that violated the CEA. Katherine Minarik, Uniswap Labs’ chief legal officer (CLO) said, “today Uniswap Labs resolved a CFTC matter, about a fraction of a percent of trading through our interface of a handful of tokens, for a $175k fine in a standard no admit-no deny settlement. We are glad to put this to rest and stay focused on building the future of DeFi for all”. Dissent Within the CFTC Upon the order, CFTC Commissioner Summer K. Mersinger made a strong dissenting statement regarding the Uniswap Labs settlement. Mersinger opened up by saying, “today, the (CFTC) once again swings its proverbial enforcement ‘hammer’ against another DeFi protocol”. The commissioner went on to highlight the case’s resemblance of regulation through enforcement, and concern that this settlement may lead to a distorted precedent for future Commission actions where DeFi protocols are penalized despite their best efforts to comply with the law. She continued, “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. Unfortunately, today is not that day”. Mersinger proceeded to criticize the CFTC’s priorities surrounding DeFi regulation, claiming that the current approach stifles innovation, despite the fact that its responsibility under the CEA is to promote it. Prior to her closing statement she said, “continuing to bring and settle these cases with DeFi platforms is not in line with the CFTC’s objectives and vision. This settlement and the Commission’s earlier ‘DeFi Sweep’ settlements raise transparency questions and concerns around the CFTC’s commitment to its stated goals.”