TL;DR
- Uniswap Labs has responded to the SEC’s Wells notice, arguing that the regulator’s legal foundations are “weak” and do not justify a lawsuit.
- 65% of your transactions involve assets that the SEC does not consider securities, and 75% of its users are outside the US.
- The SEC must stop wasting public resources in unfounded cases.
Uniswap Labs has responded forcefully to the recent notification of Wells of the SEC, in an effort to dismiss a possible lawsuit against him. In a 40-page document, the decentralized finance (DeFi) platform maintains that the regulator’s legal arguments are “weak” and do not justify a court case, urging the agency to drop the investigation.
As with so many other platforms, the SEC is questioning the exchange’s operations, suggesting that the platform could be violating US securities laws. According to the regulator, the DeFi protocol It would function as an unregistered stock exchange, with the platform interface acting as an unregistered securities broker-dealer, and the UNI token being classified as an investment contract. However, Uniswap has staunchly defended itself and remains stoic, questioning the SEC’s vague interpretation of the current regulations and their applicability to the DeFi industry.
Today we responded to the SEC’s Wells notice
We believe DeFi is revolutionary and we’re going to fight to protect it
Summary of our response and the full 40 page document here:https://t.co/u4fEWHVMVu
— Uniswap Labs 🦄 (@Uniswap) May 21, 2024
The SEC is stretching the legal definitions of securities, exchanges, and contracts to unreasonable levels to incriminate Uniswap. The platform maintains that the accusation that any value stored digitally should be considered a value is untenable. In its extensive response, the protocol highlights that its activities are aligned with recent judicial precedents that contradict the regulator’s position. Furthermore, they argue that the SEC should not waste taxpayer-funded resources on such an unwarranted case.
Uniswap Is Clear, the SEC Lacks Arguments
Furthermore, they emphasized that most of its trading volume does not involve securities, even under the SEC’s own criteria. Approximately 65% of its transactions involve assets that the SEC has recognized are not securities, such as Ether, wrapped Bitcoin and stablecoins. In theory, and following a line of consistency, this should destroy any argument from the regulatory body.
Another axis in the defense of Uniswap is that most of its users are not under the jurisdiction of the SEC. The company estimates that around 75% of users are located outside the United States, which limits the applicability of US securities laws. The company maintains that, although some securities-like transactions are carried out on its platform,It was not specifically designed for that purpose, and therefore should not be regulated as such.
UNI’s forceful response comes after the intensification of regulatory persecution. The SEC has been sending Wells notices left and right, filing lawsuits and negotiating settlements with various crypto companies. Among the entities under the regulator’s radar are ShapeShift, TradeStation, ConsenSys and the Foundation Ethereum.
UNI is confident that its work is on the right side of history and is confident that a fair evaluation will demonstrate the lack of merit in the SEC’s accusations. The agency should reevaluate its approach and not allocate more resources to cases that lack sufficient merit.
