The SEC has issued a notice to DeFi protocol Uniswap
The United States Securities and Exchange Commission (SEC) has issued a notice to decentralized exchange Uniswap.
On X (formerly Twitter), Uniswap Chief Legal Officer Marvin Amory confirmed the regulator's notice on April 10. “Today's announcement by Wells on @Uniswap is disappointing, but not unexpected from the SEC,” Amory wrote.
“If the SEC had jurisdiction over non-intermediary products in our own protection, it could tell us how to register them. It cannot and therefore cannot. It has not provided any clarity and guidance – as many SEC commissioners have pointed out in several objections.”
A Wells notice is a formal notice issued by the SEC to inform a company or individual that the regulatory staff intends to recommend enforcement action against them. This notice gives the recipient an opportunity to submit a written explanation or argument (“Wells submission”) why such action should not be taken.
Uniswap enables automated token exchanges on the Ethereum blockchain, allowing users to exchange multiple crypto tokens without the need for traditional intermediaries such as a central exchange.
The SEC is investigating Uniswap Labs, the main developer of Uniswap, starting in 2021. DEX has previously removed several tokens from the platform, citing increasing regulatory pressure.
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As part of its defense, Uniswap Labs previously said it was solely the software developer responsible for building the front-end portal for the app. The front end is separate from the Uniswap protocol itself, which is independent code released for public use.
“Uniswap's protocol, web app and wallet do not meet the legal requirements of securities exchanges or brokers,” Amory said, adding that the protocol “rejects crypto regulations and the clear rule of law we expect in the US.” Continued arbitrary enforcement and abuse of power.
The SEC has issued similar notices in the past, warning of legal action against crypto exchanges Coinbase and Binance.
While the US SEC announced its latest legal action against crypto protocols, the EU is advancing its Markets in Crypto-Assets (MiCA) regulation on DeFi protocols, including their front-ends.
The EU regulator is expected to prepare a report by December 30, 2024, assessing the applicability of certain rules on decentralized financial markets. The report explores how decentralized systems, particularly those without a clear provider or service provider, should be addressed in the region.
