Uniswap Gets SEC Potential Lawsuit Warning

Key Points

• Uniswap Labs, the creator of the world’s largest DeFi exchange, receives SEC warning.
• The notice from the SEC indicates that it faces a potential lawsuit.

The United States Securities and Exchange Commission (SEC) has issued a Wells notice to the Uniswap DeFi exchange.

A Wells notice is a formal notification issued by the SEC that informs a company or individual about the intentions of the regulator staff to recommend enforcement actions against them.

This notice offers the recipient the opportunity to provide a written explanation or an argument about the potential reasons for which such action should not be taken.

Uniswap founder and CEO addresses SEC’s move

The founder and CEO of Uniswap, Hayden Adams, addressed the move made by the SEC on X.

He confirmed that Uniswap Labs received a Wells notice from the SEC, highlighting his disappointment and saying that he is ready to fight.

He explained that the products they are offering are legal and their work is “on the right side of history.”

Adams also said that it’s clear for a while that instead of working to create clear and informed rules, the SEC’s focus became to attack long-time good actors such as Uniswap and Coinbase while letting bad actors such as FTX slip.

He brought up the fact that Uniswap was not created to reimagine finance, but it was more of an experiment in radically decentralized and fully automated on-chain markets.

The Uniswap Protocol has processed more than $2 trillion in volume to this day, and thousands of teams and devs have forked the code or built on top of it.

Adams highlighted that the team has built an entirely new financial infrastructure that is transparent, fair, secure, and accessible, powering an entire industry.

He argued that the SEC’s mission is allegedly to protect investors, and maintain fair, orderly, and efficient markets while facilitating capital formation. But, he says, Uniswap does a far better job in this direction compared to the SEC today.

He also shared more legal details, including the reasons for which the SEC is not acting in good faith, saying that they are going to win. He cited data from Marvin Ammori, chief legal officer, who confirmed the notice on April 10.

In his own post on X, Ammori addressed the fact that if the SEC had authority over their self-custodial, non-intermediated products, it could tell them how to register them, but it has not done this so far. He highlighted that the SEC provided no clarity or guidance.

The SEC has been investigating Uniswap Labs since 2021 and has also issued similar notices in the past to Coinbase and Binance, warning about legal actions.

This move from the SEC is seen as a declaration of war on the crypto industry.