The software development firm, Uniswap Labs, says it has placed restrictions on certain tokens, including tokenized equities and derivatives on the protocol interface it supports, in a Friday blog article.
This recent development is occurring less than a week after the declaration by U.S. authorities that they would more closely monitor this kind of product. In justifying the company’s decision, Uniswap noted an “evolving regulatory environment”
As of today, we have started restricting access to a small number of tokens at https://t.co/liqYXtQoM2
These changes pertain to the interface at https://t.co/liqYXtQoM2 — the Protocol remains entirely autonomous, immutable, and permissionless.
— Uniswap Labs 🦄 (@Uniswap) July 23, 2021
Ongoing Delisting of Synthetic Assets
Other cryptocurrency firms have similarly announced the cancellation of their tokenized stock offerings, including Binance. Uniswap is using its own interface to limit access to its platform. The decentralized finance (DeFi) network still supports these coins, but others may still be found on other sites.
Regulators, including as prominent U.S. politicians, are increasingly calling attention to the wider crypto sector. As part of his remarks to the American Bar Association on Tuesday, SEC Chair Gary Gensler stated that both centralized and decentralized stock tokens would have to be registered with the SEC.
A portion of Uniswap’s statement is as follows:
Uniswap Labs — a software development studio that contributes to the Uniswap Protocol — is proud to play a part in creating a better, more equitable financial system. One of Uniswap Labs’ contributions is the portal it provides at app.uniswap.org — an open source interface — for reliable, trustworthy interaction with the Uniswap Protocol.
To continue to innovate and provide this tool for the Uniswap community, we monitor the evolving regulatory landscape. Today, consistent with actions taken by other DeFi interfaces, we have taken the decision to restrict access to certain tokens through app.uniswap.org. These tokens have always represented a very small portion of overall volume on the Uniswap Protocol — a full list is available here.
What is Uniswap?
Uniswap is an Ethereum protocol for the automatic supply of liquidity that is decentralized (automated market making). The native token of the Uniswap protocol is UNI, which grants its holders governance rights. Improvements to the protocol are decided by the owners of UNI.
Open-source software is used to manage and decentralize Uniswap. This is a reference to the cryptocurrency markets controlled by centralized companies like Coinbase, Binance, and OKEx. Owners of UNI, a native cryptocurrency and governance token developed by a team of developers, vote on protocol changes.
UNI coins were first distributed to the protocol’s early adopters. Each Ethereum address that interacted with Uniswap before to September 1, 2020 was given the opportunity to claim 400 UNI tokens (valued at approximately $1,400 at the time). The UNI coin has a market value of approximately $500 million as of October 2020.