Uniswap Responds to SEC Wells Notice, Ready to Fight Potential Enforcement Action
Summary:
Uniswap Labs, creator of the decentralized exchange, Uniswap, has responded to the SEC's Wells notice, suggesting possible enforcement action. The company called the SEC's legal arguments weak and stated readiness to legally challenge if required. This development comes amidst the U.S. House of Representatives' potential vote on a bill that could change how crypto is regulated by the SEC and CFTC. The SEC's past Wells notices have led to lawsuits against crypto firms, and there has been speculation around the regulator labeling Ether (ETH) as a security
Uniswap Labs, the creator of the identically named decentralized exchange, has responded to a Wells notice from the US Securities and Exchange Commission (SEC), hinting at possible enforcement action. On May 21, Uniswap issued a blog post responding to the SEC's Wells notice, asserting weak legal arguments by the regulator and proclaimed it was set to contest the issue in court if necessary. The firm's legal team has successfully represented companies such as Grayscale and Ripple in disputes against the regulatory authority, said the company. Marvin Ammori, Chief Legal Officer, judged that the SEC's case has little merit and is misguided, as it effectively treats all tokens as securities under its authority. "The SEC is ill-advised to invest taxpayer-funded resources to initiate proceedings against us," announced Uniswap, "Though, we're prepared for a battle if it comes down to that."
As Uniswap was responding, the U.S. House of Representatives was gearing up to vote on a bill, namely, the Financial Innovation and Technology for the 21st Century Act. This legislation could amend the way the SEC and Commodity Futures Trading Commission (CFTC) manage crypto. Uniswap indicated the SEC's argument may be void if the bill is passed, and the CFTC might gain the power to conduct specific enforcement actions.
SEC's Wells notices to crypto organizations have occasionally led to all-out lawsuits, with one case being Coinbase in March 2023. The commission also hinted at filing enforcement proceedings against trading platform Robinhood in May.
Ammori paralleled a potential lawsuit to early internet legislation that in reality obstructed innovation. “[I]f the SEC were to sue, they'd lose, which would seriously undermine their prospective jurisdiction over DeFi, crypto, and future technologies,” Ammori said. It hasn't been established whether the SEC's enforcement action is associated with the ideas that the regulatory body might categorize Ether (ETH) as a security.
Uniswap, a facilitator of automated token exchanges on the Ethereum blockchain, will likely hear confirmation or rejection from the SEC regarding applications for spot Ether exchange-traded funds to be listed and traded on U.S. exchanges by May 23.
Published At
5/21/2024 11:07:26 PM
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