SEC vs Uniswap: War on DeFi
Uniswap, one of the largest decentralized cryptocurrency exchanges, has been warned by the US Securities and Exchange Commission (SEC) of possible legal action.
The exchange announced its determination to resist. She noted that the regulator's arguments are unconvincing. The community showed support for Uniswap and its founder Hayden Adams.
The SEC has issued a “Wells notice.” The SEC typically allows 30 days to respond with legal arguments why charges should not be brought against the recipient of the notice.
The exchange announced its determination to resist. She noted that the regulator's arguments are unconvincing. The community showed support for Uniswap and its founder Hayden Adams.
The SEC has issued a “Wells notice.” The SEC typically allows 30 days to respond with legal arguments why charges should not be brought against the recipient of the notice.
A “Wells notice” is a letter sent by a regulator, usually the SEC, to warn a company or person that alleged violations of securities laws have been detected. This notice states that a civil lawsuit may be filed against the recipient.
Post by Uniswap founder. Source: X
"I am not surprised. Just annoyed, frustrated and ready to fight. I am confident that the products we offer are legal and that our work is on the right side of history,” writes Uniswap founder Hayden Adams.
He noted that in the beginning the platform was the site of an experiment in the field of “radically decentralized, fully automated on-chain markets.” It was not clear then whether this would attract the attention of consumers. To date, the protocol has processed more than $2 trillion in transactions, and "thousands" of teams have used it for their own development, Adams added.
“We have created an entirely new financial infrastructure that is transparent, fair, secure and accessible, fueling an entire industry,” he wrote.
The creator of Uniswap noted that it has long been obvious that rather than developing clear and reasonable rules, the SEC chose to focus on established market participants such as Coinbase. At the same time, according to Adams, bad actors such as FTX avoid the attention of the regulator.
Uniswap remains cautiously optimistic
Uniswap's chief legal officer, Marvin Ammori, believes the SEC's arguments against the decentralized exchange are not strong enough.
“If the SEC had authority over our non-custodial, non-intermediary products, it could tell us how to register them. He can’t and that’s why he doesn’t do it,” he noted.
Marvin notes that the SEC only has authority over securities, which clearly does not include many crypto assets such as Bitcoin, Ethereum, stablecoins or meme coins. He recalls that the SEC's review of the lawsuit against Ripple showed that transactions on the secondary market with similar assets are also not considered offers of investment contracts.
Ammori points to the court's decision in the case against Coinbase, where the judge rejected the regulator's contention that crypto wallets could be considered securities brokers. He believes that the same solution applies to the Uniswap protocol. Previously, a judge in one of the trials admitted that the Uniswap platform is mainly used for legal purposes, which, according to the lawyer, means that the regulator’s current exchange rules do not apply to Uniswap.
Ammori points to the court's decision in the case against Coinbase, where the judge rejected the regulator's contention that crypto wallets could be considered securities brokers. He believes that the same solution applies to the Uniswap protocol. Previously, a judge in one of the trials admitted that the Uniswap platform is mainly used for legal purposes, which, according to the lawyer, means that the regulator’s current exchange rules do not apply to Uniswap.
The crypto community considers the SEC's actions an attack on DeFi
The SEC's claims against Uniswap generated a huge amount of commentary. Many share Adams' view that the potential lawsuit has profound implications for the entire crypto industry.
For example, Jason Janowitz, founder of Blockworks, emphasized that the regulator’s policy towards the crypto industry could lead to its displacement outside the United States. And Offchain Labs Chief Strategy Officer AJ Warner said that today “we are all Team Uniswap.”
In his statement, the Uniswap founder emphasized that despite the disapproving regulation, he and his team remained in New York because their actions did not violate the law and were aimed at improving the country's financial system.
For example, Jason Janowitz, founder of Blockworks, emphasized that the regulator’s policy towards the crypto industry could lead to its displacement outside the United States. And Offchain Labs Chief Strategy Officer AJ Warner said that today “we are all Team Uniswap.”
In his statement, the Uniswap founder emphasized that despite the disapproving regulation, he and his team remained in New York because their actions did not violate the law and were aimed at improving the country's financial system.
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