Uniswap Labs is facing a potential enforcement action from the Securities and Exchange Commission (SEC). The regulator is considering taking legal
action against the company behind the popular decentralized finance (DeFi)
exchange Uniswap.
In a blog post published today (Wednesday), the
company disclosed that it had been served a Wells notice by the SEC. A Wells
notice is a letter issued by the regulator after the conclusion of an
investigation, indicating that it plans to pursue enforcement action against
the recipient.
Uniswap contends that its services are legal. The
exchange has assured users that its services will remain available and will
continue to “ship new products”. It argues that its platform fosters
transparent and accessible financial markets, empowering users through
self-custody and bypassing traditional intermediaries.
“If the SEC protects opaque systems and attacks
new, transparent technology that can open up opportunity and reduce costs for
Americans, the U.S. will fall behind on innovation that can power consumer
choice and freedom,” Uniswap wrote.
Today Uniswap Labs received a Wells notice from the SEC
And we’re ready to fight
This is the latest political effort to target even the best actors in crypto like Uniswap and Coinbase
All Uniswap products and the Uniswap Protocol are unaffectedhttps://t.co/i2p5LubELk
— Uniswap Labs 🦄 (@Uniswap) April 10, 2024
Uniswap believes the law is on its side. The exchange highlighted recent court decisions like SEC v. Ripple and their own legal victory in Risley v.
Uniswap Labs, which suggest secondary market trading of digital assets
generally doesn’t qualify as securities trading.
Uniswap Fights Back
Additionally, Uniswap highlights the decentralized
nature of its platform, distancing itself from the legal definitions of
securities exchanges or brokers.
Founded by Hayden Adams, Uniswap was launched in 2018
as an automated crypto exchange based on the Ethereum blockchain. According to
CoinMarketCap, the DeFi network is powered by a digital token dubbed UNI. The
Ethereum-based token has a market cap of more than $6 billion.
In March 2023, the SEC issued a similar Wells notice against Coinbase. In response, the crypto exchange criticized the regulator for lack of transparency, highlighting the ambiguity surrounding the alleged violations and the refusal to specify which assets on the platform could be deemed securities. Three months later, the regulator sued Coinbase for allegedly operating…
