Key Takeaways
- Uniswap slammed that SEC’s enforcement action is the “latest political effort to target even the best actors building technology on blockchains”.
- Uniswap denies that the tokens it offers for sale are securities
On Wednesday, Defi Protocoal Uniswap, announced that it had received a Wells notice from the U.S. Securities and Exchange Commission (SEC), hinting at a potential enforcement action. The notice notifies the individuals or the firm involved that the SEC has determined they should be charged with violating securities laws.
CEO Hayden Adams didn’t hide his frustration, expressing annoyance but also determination to fight back.
“The Wells notice informs the people or the firm in question that the SEC has concluded that they should be charged with violation of the securities laws,” Adams stated. “I’m frustrated that the SEC seems to be more concerned with protecting opaque systems than protecting consumers.”
Uniswap’s top executives, Mary-Catherine Lader and Marvin Ammori, shed light on the focus of the notice, which centered on allegations of Uniswap operating as an unregistered securities broker and exchange. However, it remains unclear whether the SEC’s scrutiny extends to Uniswap’s native token, UNI.
“Our work is on the right side of history,” Adams wrote. “But it’s been clear for a while that rather than working to create clear, informed rules, the SEC has decided to focus on attacking long-time good actors like Uniswap and Coinbase.”
Uniswap’s defense rests on the argument that it’s merely a software developer responsible for the front-end portal, distinct from the autonomous Uniswap protocol itself. Ammori voiced confidence in Uniswap’s position, pointing to a recent legal ruling involving Coinbase as a positive sign.
“I am confident that the products we offer are legal and that our work is on the right side of history,” Adams emphasized. “This fight will take years, may go all the way to the Supreme Court, and the future of financial technology and our industry hangs in the balance.”
The SEC declined to comment on the existence of an investigation, as per its standard policy. In response, Uniswap penned a blog post interpreting the Wells notice and SEC’s actions as politically motivated attacks on blockchain technology.
“The overwhelming volume of traded tokens are definitively not securities,” Uniswap stated. “They are not intrinsically securities, just as every sheet of paper is not a stock certificate.”
Uniswap staunchly denies the characterization of the tokens it offers as securities, likening them to digital file formats. The company criticized the SEC for failing to provide a registration path for businesses dealing with potentially securities-classified tokens.
“The reality is that tokens are a digital file format, like a pdf or spreadsheet, and can store many kinds of value. They are not intrinsically securities, just as every sheet of paper is not a stock certificate,”
Uniswap also challenged the SEC’s authority over crypto markets, citing conflicting statements from SEC Chairman Gary Gensler. This development unfolds against the backdrop of the SEC intensifying its scrutiny of the crypto industry, epitomized by its ongoing clash with Coinbase. Last month, a court ruling dealt a blow to Coinbase’s attempt to dismiss the SEC’s case, which contends that certain transactions on its platform constitute investment contracts
