Another Crypto Regulatory Battle For the SEC to Lose

The SEC issued a Wells Notice to Uniswap Labs, signaling an upcoming lawsuit likely over securities violations.

Why Uniswap?

The specific nature of the SEC’s allegations against Uniswap remain unknown. But knowing our lovely government, it’s likely more of what we’ve already seen: Another exchange illegally offering unregistered securities, or failing to register as a broker or an exchange.

What makes this upcoming lawsuit unique, however, is the nature of how Uniswap operates. As a leading decentralized exchange (DEX) built on top of the Ethereum network, Uniswap has become a beacon for the entire DeFi sector.

Unlike traditional exchanges, DEXs like Uniswap don’t have a central authority overseeing trades. It’s like a self-driving car. It relies on automated protocols, neutrality, and very limited governance. The protocol itself is open source and used by many other projects in the DeFi world.

Given Uniswap’s massive footprint in the world of crypto – facilitating over $2 trillion of transactions since its inception – the outcome of this case would not only be a watershed moment for the DEX itself, but for all of DeFi.

Let the battle begin: Founder Hayden Adams and Chief Legal Officer Marvin Ammori have both expressed their readiness to fight, asserting that Uniswap’s products comply with U.S. law and each, rightfully so, criticizing the SEC’s approach.

Our Thoughts

We like Uniswap. While we don’t often use it to trade the wide variety of altcoins it hosts on its exchange, Uniswap has proven to be an essential piece of infrastructure for traders and devs alike.

The protocol is 6 years old… the largest use case of Ethereum… has facilitated over $2 trillion in transactions… is home to the most copied open-source smart contract protocol (replicated over 2,000 times)… and has never been hacked.

So we have to give credit where it’s due.

On top of that, Uniswap founders have chosen to operate in broad daylight in Brooklyn, NY rather than offshore.

In other words, Uniswap is an industry leader, through and through. And the recent Wells Notice underscores a common theme with the SEC: Let’s intimidate and try to enforce the good actors, and let the bad ones slip away.

Uniswap has money to fight. They will fight. And given the SECs piss-poor success rate, Uniswap will probably win. And all of crypto will be supporting them along the way.