Uniswap has come under criticism for reporting that users were unable to trade the meme coin Ben (BEN) on its platform on May 25. However, there was another detail behind the inability to trade with this coin in Uniswap…
Uniswap takes action against these altcoins
Uniswap users reported today that they are unable to transact with the recently appeared meme coin Ben. However, the truth behind this question is simpler. The researchers show that it is only the front-end of the Uniswap website that prevents users from taking action. So the issue of connecting to the token’s smart contract has not broken its core functionality. The list of tokens subject to Uniswap’s review is quite long. In addition to meme coins such as Ben (BEN), Grump Cat (GRUMP), Gucci (GUCCI), projects such as DYDX and ENS DAO are also included in this list. Notably, major coins like BTC and ETH, as well as a number of derivative tokens based on real-world securities and assets, are among the non-tradable coins.
Many people think that Uniswap maintains this list to avoid potential legal risks in the United States, where DEX is registered as a company. US financial authorities, especially the US Securities and Exchange Commission (SEC), have taken legal action against numerous cryptocurrency projects, often on the grounds that they are securities. As a result, it is seen as a precautionary measure that Uniswap proactively blocks derivative tokens linked to the US securities market.
Why are meme coins blocked?
However, despite these considerations, many investors criticized Uniswap. Because the stock market was even blocking meme coins like BEN that posed no apparent legal risk. Some argue that Uniswap’s actions contradict the “spirit of decentralization” the platform aims to represent. In the past, Uniswap has acted in conjunction with other DeFi applications such as Balancer and Aave. It had blocked addresses associated with Tornado Cash, the “mixer” platform blacklisted by the US Department of Justice. Similarly, OpenSea and Infura have made such a move. These two platforms have restricted users from certain countries facing US sanctions.
This event pointed to the need to maintain an important balance. Because it raised questions about the sensitivity between compliance with legal requirements and maintaining the decentralized nature of DEXs. Compliance with legal frameworks is crucial for platforms like Uniswap. But it is equally important to preserve the principles of decentralization and open access that underpin the crypto industry. Finding a middle ground that meets both regulatory concerns and user expectations is difficult. This, cryptocoin.com As we reported, it has been a problem for exchanges in the past. It remains likely to be an ongoing challenge for decentralized exchanges in the future.
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