The news that Uniswap Labs received a Wells Notice from the United States Securities and Exchange Commission (SEC) keeps the cryptocurrency community on alert. Several community members express concerns about the effect of the SEC's actions, which are now heading into decentralized finance (DeFi) territory. The attitude of the regulatory body appears to many as an escalation in the bombing started a few years ago against cryptocurrency companies. In that sense, there are calls for attention to the fact that, until now, the SEC had filed lawsuits against centralized platforms, such as the exchanges Binance, Coinbase, Kraken and the company behind the XRP cryptocurrency, Ripple. Therefore, now a change is perceived on the part of the regulatory agency, due to the fact that if it sues the organization behind a decentralized protocol like Uniswap, the agency enters uncharted territory. Matt Corva, general counsel at ConsenSys, notes there may be ulterior motives aimed at stifling the development of decentralized finance (DeFi). «They will understand that the SEC is mobilized for political motivations, not to protect the consumer, not for clarity, not to comply with the law or agency practice, but to create chaos, to prevent these primitives from threatening the status quo» , express in your X account. Corva's idea is supported by lawyer Bill Morgan, who sees a pattern in the SEC, which tends to wait for the right moment before attacking companies in the sector «when they are already successful.» Adam Cochran, founder of the venture capital firm Cinneamhain Ventures, reflects on the situation. Also he wonders why the agency decided to send Uniswap a Wells Notice at this time. «This is just another blatant personal attack on space, by someone who doesn't understand the technology and is more concerned with making a name for himself than doing his job,» Cochran said. Observations of this type are becoming widespread, as Jeff John Roberts, Forbes Finance editor, believes that the SEC is seeking to stifle DeFi, “as part of a broader ideological campaign to crush cryptocurrencies.” In Roberts's article defends the work of the platform based in the United States, become one of the most successful in the decentralized finance space, with a significant volume of operations. Hence, it is described as “the flagship DeFi company.” Think of it as the kind of cutting-edge startup that should be hailed as a success story in the United States, instead of being questioned. In this way, everyone insists on the need for greater regulatory clarity, agreeing that Uniswap cannot be responsible for listing or promoting securities, because it is a decentralized market. They believe, therefore, that the SEC exceeds its functions and that your arguments are very weak.
Uniswap has a precedent in the Coinbase case
About this case Paul Grewal spoke, chief legal officer of Coinbase, one of the exchanges also facing a lawsuit from the SEC. “Assuming the SEC claims that Uniswap is an unregistered broker, they have no basis on which to stand,” he said on social media. He recalled, at this point, that a federal judge ruled last month that Coinbase Wallet could not conduct “brokerage activities” since the product does not make investment recommendations or hold client funds. Thus, consider that the situation of the decentralized protocol is similar to that of the Coinbase wallet. This, taking into account that Uniswap is a decentralized exchange or DEX which uses a set of smart contracts to execute operations.
How can you reconcile the SEC's claim that Uniswap acts as an intermediary when there is a Court ruling against the agency from just a few days ago? Answer: you can't. Paul Grewal, Chief Legal Officer at Coinbase at X.
These approaches are part of the arguments that Uniswap's defense is evaluating. Such as Indian Marvin Ammori, legal director of Uniswap Labs, who highlighted in X the legal rulings that have been made so far against the SEC. «The Uniswap protocol, the web application and the wallet do not meet the legal definitions of an exchange or securities broker. Just a few weeks ago, the judge in the SEC vs. Coinbase case dismissed the claim that cryptoasset wallets were intermediaries, even if the tokens in question were securities,” Ammori reiterated. In this way, Uniswap gets ready to mount their defense against the SEC attack, with the support of much of the cryptocurrency industry. While the UNI token experiences a drop that already exceeds 17%. Everyone expects a protracted legal battle, which could shape the future of DeFi. The outcome of this confrontation will affect Uniswap and its users, as well as setting a precedent for how regulators interact with the ecosystem.