Uniswap Challenges SEC Over DeFi Regulation

Uniswap's formal petition to the U.S. Securities and Exchange Commission (SEC) underscores its deep concern over proposed amendments to the Securities Exchange Act of 1934, which it believes would extend the SEC's regulatory reach beyond its intended scope onto DeFi platforms.

The company argues that the SEC’s amendments could potentially infringe upon judicially established boundaries.

Highlighting the evolving legal landscape, Uniswap Labs insists that the SEC’s current definition of ‘exchange’ does not adequately encompass the decentralized nature of DeFi protocols.

The company faces regulatory action after receiving a Wells Notice from the SEC in April, alleging Uniswap’s operation of unregistered securities trading as both an exchange and a broker.

Uniswap Labs counters that its protocol functions as passive technology facilitating peer-to-peer transactions rather than a traditional exchange.

Moreover, Uniswap Labs calls for an extended comment period to ensure that any regulatory changes align with the present legal framework and do not inadvertently stifle innovation.

They express concern that the SEC’s enforcement-oriented approach, rather than establishing clear regulatory guidelines, risks creating uncertainty within the DeFi industry. Uniswap Labs remains steadfast in its commitment to challenging what it perceives as regulatory overreach, positioning itself to defend the DeFi ecosystem in potential legal battles up to the Supreme Court if necessary.