May 01, 2024

SEC Files Enforcement Notice Against DeFi Exchange Uniswap

  • Popular DEX Uniswap got hit with a law enforcement notice, which is pending when the case gets to court. Uniswap CEO Hayden Adams reacts to the recent development, saying the SEC is deviating from their mission.
  • Uniswap native token UNI was affected, depreciating by more than 15%.

The bad blood between the US Securities and Exchange Commission and the crypto industry continues in 2024. The latest event is the serving of Wells Notice to one of the most prominent decentralized exchanges in the crypto industry, Uniswap. Fundamentally, this could potentially lead to a full-blown legal wall between the SEC and Uniswap.

Uniswap Receives Wells Notice From the US SEC

Decentralized crypto exchange Uniswap received a notice from the U.S. Securities and Exchange Commission (SEC) expressing their decision to pursue a legal case against them. Uniswap founder and CEO Hayden Adams confirmed the receipt of the enforcement notice.

A Wells Notice is basically an official document issued to organizations by the SEC to provide them with the chance to seek rebuttals against allegations. However, this is just a formality, as the SEC is likely to proceed with a full-fledged lawsuit against the DeFi exchange.

Immediately after the news reached the public domain, Uniswap’s native token, UNI, dropped by more than 9%. At press time, there’s a massive 15% dip in the price of this token, with the market cap and value decreasing to $5 billion and $9.3, respectively.

Uniswap Response to the SEC

Uniswap’s blog post expressed their view on the recent enforcement document shared with them by the SEC. The DEX said this is part of the US government’s effort to frustrate the progress the crypto industry is making.

The blog post said, “We can only conclude that this is the latest political effort to target even the best actors building technology on blockchains.”

While highlighting that the SEC does not have a case against them, the DeFi exchange said all the products within their ecosystem were legal. According to them, tokens traded on secondary markets like Uniswap are not to be termed or classified as securities.

“We are confident that the products we offer are not just legal – they are transformative. They empower people across the world by enabling transparent, verifiable markets with fewer gatekeepers, which allows for cheap, accessible, global economic participation,” Uniswap added.

CEO Hayden Adams Reacts to the Notice From the US SEC

In a post on Twitter, now X, Hayden Adams shared his thoughts about the recent development, stating he was disappointed with the US commission.

Not only did Adams indicate the company’s willingness to fight the SEC, but he also pointed out some of the things the commission has been getting wrong. He said the US SEC should be more focused on creating clear and concise rules and regulations regarding crypto operations in the US. Furthermore, he condemned the SEC’s decision to attack companies like Uniswap and Coinbase instead of going for bad actors like FTX (when it was still in operation).

“I am confident that the products we offer are legal and that our work is on the right side of history. 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. All while letting bad actors like FTX slip by,” he added.

In his closing remarks, Adams said the SEC was deviating from its mission to protect customers. The Uniswap founder accuses the commission of being more focused on protecting “opaque systems than protecting consumers.”

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