On May 21, Uniswap Challenges SEC's Wells Notice, Defends Crypto Tokens

May 21, 2024, 05:42 PM

On May 21, Uniswap Labs formally responded to the Wells notice issued by the U.S. Securities and Exchange Commission (SEC) in April, arguing that the potential enforcement action against it lacks merit. Uniswap, a prominent decentralized trading platform on Ethereum, contends that crypto tokens are not securities and that its protocol facilitates secure, intermediary-free trading. The company criticized the SEC's approach, urging the agency to support open-source technologies that enhance financial systems rather than litigate them out of existence. Uniswap's response, which included statements from founder Hayden Adams, also highlighted the absence of a solid legal theory from the SEC, questioning whether the platform can be held liable for securities traded on its site and whether building an interface constitutes brokerage activities. The SEC's notice had classified liquidity provider (LP) contracts as securities and labeled Uniswap as an unregistered exchange and its wallet/site as a broker. Uniswap also stated that the SEC is "not the world internet police."