- Uniswap Labs confronts SEC allegations, claiming the regulatory definitions do not apply to their operations.
- The company argues that the majority of its transaction volume consists of non-security assets like Ethereum and Bitcoin.
- “The battle is not worth it,” states Uniswap Labs, urging the SEC to reconsider its planned lawsuit.
Uniswap Labs challenges SEC’s regulatory stance, asserting that its operations do not constitute a securities exchange.
Uniswap’s Legal Battle with the SEC
In April, Uniswap Labs received a Wells Notice from the SEC, indicating the regulator’s belief that the company violated securities laws by operating as an unregistered securities exchange and broker. Uniswap Labs has contested these allegations, arguing that its protocol does not meet the definition of an exchange and thus should not be subject to SEC regulation.
Reinterpretation of Exchange Definitions
Martin Ammori, Chief Legal Officer at Uniswap Labs, emphasized the need for the SEC to redefine its concept of an exchange for it to have jurisdiction over Uniswap. According to current definitions, Uniswap would need to be specifically designed for securities trading, which it is not. Ammori highlighted that 65% of the protocol’s transaction volume involves non-security assets such as Ethereum, Bitcoin, and stablecoins.
Recent Court Decisions and Regulatory Overreach
Ammori also pointed to a recent federal court decision that rejected the SEC’s claim that Coinbase Wallet was an unregistered securities broker. He argues that this, along with the SEC’s attempt to redefine several terms in its regulations, exceeds the authority granted to it by Congress, potentially impacting Uniswap’s operations.
Conclusion
Uniswap Labs stands firm in its position against the SEC’s allegations, supported by recent legal precedents and the nature of its technology. The outcome of this dispute will likely have significant implications for the cryptocurrency industry and regulatory practices moving forward.
