Uniswap Responds to SEC’s Wells Notice, Criticizes ‘Weak’ Legal Arguments
Uniswap Labs has submitted a comprehensive 40-page response to the SEC’s Wells Notice, pushing back against a potential lawsuit and urging the agency to drop the case. This comes after the SEC expressed concerns a few weeks ago that Uniswap’s operations may be in violation of US securities laws. The decentralized crypto exchange is now providing a detailed explanation of why it believes the SEC’s claims are unfounded.
Uniswap is a decentralized finance (DeFi) platform that caters to developers, traders, and liquidity providers. However, the SEC alleges that the Uniswap Protocol functions as an unregistered securities exchange under the control of Uniswap Labs. The SEC also labels the Uniswap interface as an unregistered securities broker-dealer and considers the UNI token to be an investment contract.
Uniswap argues that the SEC’s legal assertions are “weak” and contradict court rulings. The crypto marketplace contends that the agency is stretching the definitions of securities, exchanges, and contracts unreasonably. It also states that the SEC’s accusations are based on the notion that any value stored in digital format can be classified as a security.
“We are confident that our actions are aligned with the right side of history,” Uniswap asserts. “The SEC should not allocate taxpayer funds towards pursuing a case against us.”
Uniswap maintains that the majority of trading on its platform does not involve securities, even according to the SEC’s own criteria. It highlights that a significant portion (65%) of its trading volume consists of assets that the SEC itself has acknowledged as not being securities, such as Ether, wrapped Bitcoin, and stablecoins.
Furthermore, Uniswap argues that US securities laws would not apply to most of its users, estimating that 75% of them are located outside the US.
The marketplace asserts that even if a few transactions resembling securities occurred on its platform, it should not be considered a securities exchange. It argues that a court would not view it as such because the platform was not specifically designed for those types of transactions.
The SEC has been actively issuing Wells notices, filing lawsuits, and reaching settlements with numerous crypto companies. Its focus is shifting towards Ethereum and DeFi players, with ShapeShift, TradeStation, Uniswap, Consensys, and even the Ethereum Foundation reportedly facing legal action.
Follow us on Google News.
