Uniswap Labs, the developer behind the decentralized exchange of the same name, has responded to the United States Securities and Exchange Commission (SEC) issuing a Wells notice to the firm, suggesting a potential enforcement action.
In a May 21 blog post, Uniswap claimed the SEC had made “weak” legal arguments in issuing a Wells notice to the exchange and vowed it was “ready to fight” the matter in court if necessary. The company said its lawyers had successfully represented firms, including Grayscale and Ripple, against the financial regulator. Chief Legal Officer Marvin Ammori claimed that the SEC’s case was “weak and wrong” based on treating all tokens as securities under its purview.
“The SEC should not devote its taxpayer-funded resources to bringing a case against us,” said Uniswap. “But we’re prepared to fight.”
The company’s response was timely, as the U.S. House of Representatives prepared to vote on a bill — the Financial Innovation and Technology for the 21st Century Act — that could change how the SEC and Commodity Futures Trading Commission (CFTC) regulate crypto. Uniswap hinted that should the legislation become law, the SEC’s case could be a moot point, with the CFTC given authority to bring specific enforcement actions.
Related: SEC tries again for Debt Box suit dismissal with option to refile
Some of the Wells notices issued by the SEC to crypto firms later resulted in full-fledged lawsuits, including one to Coinbase in March 2023. The commission also suggested plans to file enforcement actions against trading platform Robinhood in May.
“[I]f the SEC brought a case, it would lose, and lose in ways that undermine any future authority over DeFi, crypto, and future tech,” said Ammori, comparing the potential lawsuit to early laws stifling innovation on the internet.
It’s unclear if the SEC’s enforcement action was related to reports the regulator was considering labeling Ether (ETH) as a security. Uniswap enables automated token exchanges on the Ethereum blockchain. The SEC is set to approve or deny applications of spot Ether exchange-traded funds for listing and trading on U.S. exchanges by May 23.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?
