Uniswap Labs Challenges SEC's Attempts to Regulate DeFi

By: Isha Das

Uniswap Labs has issued a robust response to the SEC's Wells notice, calling the regulatory body's actions misguided and legally unsound. In a blog post dated May 20, Uniswap Labs expressed confidence in prevailing if forced into litigation. The company stated that the SEC's efforts to impose regulations on DeFi are fundamentally flawed and detract from the potential benefits of open-source technology in modernizing financial systems.

Uniswap Labs criticized the SEC's attempts to extend its jurisdiction over digital markets and communication technologies, asserting that the agency's legal arguments have repeatedly been refuted in court. The company emphasized that the Uniswap Protocol, which operates autonomously and has handled $2 trillion in trades without being compromised, aligns with the SEC's mandate to protect investors and maintain orderly markets.

The firm also rejected the SEC's classification of the Uniswap protocol as an unregistered securities exchange and the UNI token as an investment contract. Uniswap Labs argued that tokens facilitated by the protocol are merely file formats similar to PDFs, and that the protocol itself is a general-purpose tool akin to TCP/IP, used largely for non-securities transactions involving assets like Ethereum and stablecoins.

Marvin Ammori, CLO of Uniswap Labs, declared that the company's case is strong enough to win in court, asserting that the SEC is attempting to redefine legal terms beyond their conventional meanings. Uniswap Labs has enlisted prominent legal experts who previously defended successful cases against the SEC, including former SEC enforcement head Andrew Ceresney and former US Solicitor General Don Verrilli.