MEXCAmid Growing Regulatory Scrutiny, Uniswap (UNI) Restricts Stock Tokens on Its Trading App
The growing scrutiny in the decentralized finance (DeFi) crypto space is forcing blue-chip DeFi players to initiate crucial measures. Decentralized exchange (DEX) Uniswap Labs said that it has started restricting dozens of tokens on its trading app.
This includes some of the stock tokens that mirror the price of public listed Wall street companies like Facebook (NASDAQ: FB), Tesla (NASDAQ: TSLA), and others. Uniswap is saying that it is closely monitoring the “evolving regulatory landscape”. Thus, it called its recent move as “consistent with actions taken by other DeFi interfaces”.
But there’s no change in the underlying Uniswap Protocol which allows such assets to trade. Meaning, other interfaces used to access Uniswap, can still facilitate the trade for synthetic equities. The recent warnings issued by SEC chairman Gary Gensler put a major warning to DEXs. In a speech last week to an American Bar Association committee meeting, Gensler said:
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable-value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.”
Uniswap Follows Binance
The recent move from Uniswap comes after Binance suspended stock tokens last week. Following strong regulatory action, Binance has to discontinue this service. Apart from just stock tokens, Uniswap will also suspend trading of tokens that track the value of gold, oil futures, Korean won, Japanese yen, and other synthetic versions of digital currencies like Bitcoin and Litecoin.
The regulatory actions have been forcing crypto exchanges to take decisive measures in this regard. Earlier on Monday, crypto exchange FTX reduced its leverage to one-fifth i.e. 20x from 100x on margin calls hinting at regulatory measures. FTX CEO Sam Bankman-Fried made the official announcement through his Twitter handle. Following this, Binance CEO changpeng Zhao also made similar announcement later on Monday.
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