Uniswap Labs “Ready to Fight” US SEC in Court

Uniswap Labs, the company behind Uniswap, has responded to the US SEC’s Wells notice. The SEC had claimed that the Ethereum-based DEX operated as an unregistered exchange and securities broker-dealer.

The notice further alleged that UNI tokens represented investment contracts. Let0s discover more about this important news for Uniswap.

The SEC often issues a Wells notice to individuals or companies it believes violate US laws and could face enforcement action. In response to the SEC’s notice, Uniswap Labs noted that the SEC’s “aggressive theories” aim to extend the regulator’s jurisdiction outside the scope of its authority.

According to a blog post, the company also expressed confidence that the House will approve a measure granting the Commodity Futures Trading Commission (CFTC) control over the trading of digital assets.

Source: X

Uniswap Labs urged the regulator to “embrace open-source technology that improves outdated commercial and financial systems, instead of attempting to litigate it out of existence.”

The crypto company added: “We’re confident that our work is on the right side of history. The SEC should not devote its taxpayer-funded resources to bringing a case against us.”

Confident Against SEC’s Arguments 

Uniswap said in a Tuesday blog post that the SEC had presented “weak” rationales for sending the exchange a Wells notice. The company further noted that it was “ready to fight” the issue in court if needed.

Source: X

Uniswap also claimed that its attorneys had successfully defended companies against the SEC, such as Ripple and Grayscale. Uniswap’s Chief Legal Officer, Marvin Ammori, remarked that since the SEC treats all tokens as securities, their argument is “weak and wrong.”

“The SEC arguments rest on the false assumption that just about ‘all’ tokens are securities (which the SEC then refuses to register). But a token is merely a file format – like a PDF or JPEG. Tokens can represent any value, and overwhelmingly represent commodities (BTC, ETH, stablecoins) and memes, and access to useful networks. PDFs are not inherently stock certificates, and tokens are not inherently securities,” Amorim argued.

Ammori further stated that the SEC’s charge that Uniswap’s wallet and interface function as brokers will be unsuccessful. He cited a previous federal court decision that rejected the SEC’s argument that the Coinbase Wallet amounts to an unregistered securities broker.

Source: X

Uniswap believes any legal action from the SEC against its operations would require the regulator to exceed its jurisdiction. The company’s attorneys warned that suing Uniswap would deter “future innovators from attempting to foster new ideas that bring much-needed competition and innovation to financial and commercial markets.” It would also force American cryptocurrency investors to adopt foreign trading platforms.

Interestingly, Uniswap witnessed trading activity of about $3 trillion in the days after receiving the SEC’s notice.

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