Uniswap Labs is facing a potential enforcement action from the Securities and Exchange Commission (SEC). The regulator is considering 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 Faces Scrutiny
Uniswap contends that its services are legal. The exchange has assured users that its services will remain available and will continue to develop new services. 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 believes the law is on its side. They point to 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.
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