‘Ready to fight’ for DeFi
Uniswap Labs, the developer behind the decentralized exchange of the same name, has hinted at possible enforcement action as the US Securities and Exchange Commission (SEC) issued a notice to the firm.
In a blog post on May 21, Uniswap said the SEC made “weak” legal arguments for issuing Wells' notice to the exchange and that it was “ready to fight” the case in court if necessary. The company said its lawyers have successfully represented companies including Greyscale and Ripple before the financial regulator. Chief Legal Officer Marvin Amory called the SEC's case “weak and flawed” based on treating all tokens under its supervision as securities.
“The SEC should not be spending its taxpayer-funded resources to prosecute us,” Uniswap said. But we are ready to fight.
The company's response was timely as the US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act – which could change how the SEC and the Commodity Futures Trading Commission (CFTC) regulate crypto. Uniswap suggests that if the bill becomes law, the SEC's case could be a valid point, with the CFTC empowered to bring certain enforcement actions.
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Some of Wells' notices have resulted in full charges filed by the SEC against crypto companies, including one against Coinbase in March 2023. In May, the commission announced plans to bring enforcement action against trading platform Robinhood.
“[I]If the SEC brings a case, it will lose, and lose, in a way that weakens future jurisdiction over DeFi, crypto, and future technologies,” Amory said, comparing the lawsuit to previous laws that stifled innovation on the Internet.
It is unclear if the SEC's enforcement action is related to reports that the regulator is considering designating Ether (ETH) as a security. Uniswap enables automated token exchanges on the Ethereum blockchain. The SEC has until May 23 to approve or ban spot exchange-traded funds from listing and trading on US exchanges.
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