Uniswap Labs has formally responded to the Securities and Exchange Commission’s (SEC) Wells notice, arguing against potential enforcement actions. In a detailed 43-page submission, Uniswap contends that legal action is not the appropriate solution and calls for Congress to establish clear crypto regulations.
Uniswap asserts that it is not a traditional exchange and emphasises that the SEC lacks the authority to regulate bitcoin, ether, or stablecoins, which are the main assets traded on its platform. These assets, according to Uniswap, are not securities but alternative assets such as stablecoins, utility tokens, and commodities.
The decentralised nature of Uniswap is a key point in their argument. Unlike traditional exchanges, Uniswap does not maintain user accounts or collect personal data, complicating the SEC’s efforts for transparency and oversight. Uniswap warns that SEC litigation would likely drive American users to foreign platforms, making regulation more challenging and stifling innovation. “Bringing this case would encourage Americans to use harder-to-regulate foreign interfaces,” Uniswap stated, emphasising the need for innovation in financial markets.
Uniswap insists that Congress, not the SEC, should establish regulations for the crypto industry, asserting that the SEC “cannot achieve its goals through litigation.” This stance mirrors actions taken by other crypto companies like ConsenSys, which sued the SEC after receiving a Wells notice, claiming the SEC overstepped its authority and failed to provide clear guidelines, particularly regarding Ethereum and ether.
The SEC’s scrutiny also extends to Robinhood, which received a Wells notice regarding its crypto operations. Robinhood has warned of potential legal actions, including civil and administrative proceedings. The SEC has not commented on the Wells notices for Uniswap and Robinhood, adding to the uncertainty within the crypto industry, which is seeking clearer regulatory guidelines.
