SEC Targets Uniswap: Wells Notice Issued

Uniswap Labs, the company operating Ethereum’s foremost decentralized exchange (DEX), was inspected by the United States Securities and Exchange Commission (SEC).

According to a Bloomberg report, the regulatory body sent the company a Wells Notice indicating its plans to take enforcement action. Uniswap first revealed this development in a blog post, though the SEC has refrained from offering commentary.

The potential legal action’s nature remains uncertain, fueling speculation among industry observers and stakeholders. Yet, insights into SEC Chairman Gary Gensler’s consistent stance on regulating decentralized crypto exchanges offer some hints.

However, Gensler has argued before that platforms such as Uniswap lack genuine decentralization, potentially bringing them under the SEC’s regulatory scope. This implies that the SEC might accuse the decentralized exchange (DEX) of trading unregistered securities, echoing actions against centralized exchanges like Coinbase and Binance.

Coinbase Faces Scrutiny Amidst SEC Notice

Marvin Ammori, Uniswap’s Chief Legal Officer, affirmed the company’s preparedness to tackle the prospective lawsuit, characterizing it as regulatory overreach. “Uniswap Labs is ready to challenge this overstep,” stated Ammori, exuding confidence in a positive resolution.

According to CoinMarketCap data, Uniswap’s native token, UNI, saw an immediate drop of around 16%, as of 1:15 a.m. ET on Thursday, the digital asset is value at $9.45 and boasts a market capitalization of $5.65 billion.

Nevertheless, certain sceptics within the cryptocurrency sphere have expressed dissatisfaction with Coinbase. Online users emphasize that Coinbase’s decision to remove XRP proved futile since the SEC pursued action against them regardless.

Furthermore, some individuals have taken the opportunity to spotlight the questionable coins available on the platform, dissecting Armstrong’s Twitter thread and questioning the efficacy of the purported “rigorous asset review process.

Likewise, Paul Grewal, the Chief Legal Officer of Coinbase, took to Twitter to share a series of tweets elaborating on the SEC’s Wells Notice. Grewal focused primarily on the legal dimensions of the issue, asserting that Coinbase had engaged with the SEC on more than 30 occasions in the preceding nine months without any response.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.