In the latest episode of The Crypto Exchange, host Ethan Ostroff is joined by Addison Morgan to discuss the CFTC’s recent enforcement action against Uniswap. The CFTC alleged that Uniswap violated the Commodity Exchange Act (CEA) by facilitating retail commodity transactions on behalf of ineligible contract participants (i.e., retail consumers) through its decentralized exchange, which allowed consumers to buy and sell ERC-20 tokens that track the prices of Bitcoin and Ether and provide the holder with a potential return compounded by approximately twice the consumer’s initial investment .

Ethan and Addison examine the mechanics of these “index tokens,” designed to mitigate the risks associated with traditional margin futures trading. They explore the leverage characteristics of the tokens and the CFTC’s interpretation of the CEA, including the “actual delivery” exception.

Their discussion also addresses the potential impact of these enforcement measures on the industry, the likelihood of litigation, and the broader regulatory landscape. See less –