Uniswap is Ready to Fight SEC Over DeFi

Uniswap is ready to fight against the United States Securities and Exchange Commission (SEC) for their Wells notice against them.

Uniswap Labs, the developer of the decentralized exchange bearing the same name, has responded to the Wells notice issued by the United States Securities and Exchange Commission (SEC) to the firm, indicating the possibility of enforcement proceedings.

Uniswap asserted in a blog post dated May 21 that the SEC’s legal arguments in issuing a Wells notice to the exchange were “weak” and resolved to “fight” the matter in court if necessary. The company stated that firms, including Grayscale and Ripple, were effectively represented by its attorneys in their dispute with the financial regulator. Chief Legal Officer Marvin Ammori characterized the SEC’s case as “weak and erroneous” because it categorized all tokens as securities subject to its jurisdiction.

Uniswap stated, “The SEC should not use taxpayer funds to pursue a lawsuit against us.” However, “we are prepared to fight.”

As the U.S. House of Representatives prepared to vote on the Financial Innovation and Technology for the 21st Century Act, a bill that could alter how the SEC and Commodity Futures Trading Commission (CFTC) regulate cryptocurrencies, the company’s response was timely. Uniswap suggested that the SEC’s case might be rendered irrelevant if the legislation is enacted, as the CFTC would be granted jurisdiction to initiate particular enforcement actions.

Sure, Wells notices that the SEC issued to cryptocurrency firms subsequently led to the filing of complete litigation, one of which was directed at Coinbase in March 2023. Additionally, the commission proposed that enforcement actions be initiated against the trading platform Robinhood in May.

“If the SEC filed a lawsuit, it would lose, and in ways that undermine any future authority over DeFi, crypto, and future technology,” Ammori said, drawing a parallel between the prospective lawsuit and early internet regulations that stifled innovation.

The potential correlation between the SEC’s enforcement action and allegations that it contemplated classifying Ether as a security remains unknown. Uniswap facilitates token exchanges automatically over the Ethereum blockchain. By May 23, the SEC is scheduled to grant or reject spot Ether exchange-traded funds applications to list and trade on U.S. exchanges.