Decentralized
crypto
exchange
Uniswap
received
a
notice
from
the
U.S.
Securities
and
Exchange
Commission
(SEC)
that
it
intends
to
pursue
an
enforcement
action,
the
company
disclosed
on
Wednesday.
Uniswap’s
native
token,
UNI,
dropped
9.5%
immediately
after
the
news.
Uniswap
CEO
Hayden
Adams
announced
the
receipt
of
the
so-called
Wells
notice
on
X,
saying
he
wasn’t
surprised,
“just
annoyed,
disappointed,
and
ready
to
fight.”
Wells
notices
are
preliminary
warnings
that
inform
respondents
of
the
charges
the
regulator
is
considering
bringing
against
them.
They
usually
lead
to
enforcement
actions.
In
a
press
conference
on
Wednesday
afternoon,
Uniswap’s
COO
Mary-Catherine
Lader
and
Chief
Legal
Officer
Marvin
Ammori
told
reporters
that
the
content
of
the
Wells
notice
was
focused
on
Uniswap
acting
as
an
unregistered
securities
broker
and
unregistered
securities
exchange.
It
remains
unclear
whether
Uniswap’s
native
token,
UNI,
was
implicated
as
a
potential
security
in
the
SEC’s
notice.
Ammori
said
that
he
believes
that
Uniswap
does
not
meet
the
SEC’s
current
definition
of
an
exchange.
He
also
pointed
to
a
recent
ruling
in
the
SEC’s
case
against
Coinbase
–
in
which
a
judge
said
that
Coinbase
Wallet
was
not
a
broker
– as
a
good
sign
for
Uniswap’s
ability
to
beat
the
SEC
on
the
same
charges
(the
judge
ruled
that
the
SEC’s
other
allegations
against
Coinbase
could
move
forward).
“I
am
confident
that
the
products
we
offer
are
legal
and
that
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.
All
while
letting
bad
actors
like
FTX
slip
by.”
Adams
said
that
Uniswap
will
fight
the
charges.
“I’m
frustrated
that
the
SEC
seems
to
be
more
concerned
with
protecting
opaque
systems
than
protecting
consumers.
And
that
we’ll
have
to
fight
a
US
government
agency
to
protect
our
company
and
our
industry,”
Adams
wrote.
“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.
If
we
stand
together
we
can
win.
I
think
freedom
is
worth
fighting
for.
I
think
DeFi
is
worth
fighting
for.”
An
SEC
spokesman
said
the
agency
“does
not
comment
on
the
existence
or
nonexistence
of
a
possible
investigation.”
Regulation
via
enforcement
In
a
Wednesday
blog
post,
Uniswap
wrote
that
the
Wells
notice,
as
well
as
the
SEC’s
lawsuits
against
Coinbase
and
other
crypto
companies,
indicates
that
their
action
against
Uniswap
is
just
“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,
despite
the
SEC’s
position
that
most
tokens
besides
bitcoin
fall
under
their
jurisdiction.
“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,”
the
blog
post
said.
“The
overwhelming
volume
of
traded
tokens
are
definitively
not
securities
–
they
are
stablecoins,
community
and
utility
tokens,
and
commodities
like
Ethereum
and
Bitcoin.”
The
blog
post
added
that,
in
cases
where
a
token
may
in
fact
be
a
security,
“the
SEC
has
refused
to
create
a
path
for
businesses
to
register.”
Uniswap
did
not
comment
further
on
the
matter,
aside
from
directing
CoinDesk
to
Adams’
social
media
post
and
the
company’s
blog
post.
Waiting
on
Congress
Uniswap
argued
that
the
SEC
has
“no
authority
from
Congress”
to
oversee
the
crypto
markets,
citing
SEC
Chairman
Gary
Gensler’s
past
testimony
before
Congress
that
a
new
law
would
need
to
be
passed
to
give
the
agency
the
necessary
powers
to
effectively
regulate
the
industry,
though
Gensler
has
since
argued
that
the
existing
securities
laws
are
sufficient
for
the
regulator
to
police
crypto.
Efforts
to
pass
a
comprehensive
regulatory
framework
for
the
crypto
industry
have
stalled,
and
will
likely
remain
stagnant
ahead
of
the
upcoming
presidential
election.
UPDATE
1
(April
10,
2024
at
19:12
UTC):
Updated
to
include
additional
information
about
Uniswap’s
blog
post.
UPDATE
2
(April
10,
2024
at
19:56
UTC):
Updated
to
include
Uniswap’s
comments
from
a
press
conference.
