Uniswap Labs has issued a defiant response to the SEC’s Wells discover, asserting the company’s makes an attempt to manage DeFi are misguided and legally unsound.
The corporate stated in a Might 20 weblog put up that it’s assured it is going to come out victorious if pressured into litigation by the SEC. Uniswap Labs stated:
“We’re assured that our work is on the appropriate facet of historical past. The SEC mustn’t dedicate its taxpayer-funded assets to bringing a case in opposition to us.”
The response comes amid a broader conflict over the way forward for monetary expertise and market regulation.
Legally unsound
Uniswap Labs criticized the SEC’s efforts to broaden its jurisdiction over communications expertise and digital markets, claiming the company’s authorized arguments are weak and have been repeatedly refuted in court docket.
The corporate stated:
“We consider the SEC ought to embrace open-source expertise that improves on outdated business and monetary techniques as a substitute of trying to litigate it out of existence.”
It additionally highlighted that the Uniswap Protocol aligns with the SEC’s mission to guard traders and preserve honest, orderly, and environment friendly markets.
Uniswap Labs defended the Uniswap DEX as a serious market innovation that has enabled customers to transact instantly with out counting on centralized intermediaries. It added that the protocol — which operates autonomously and has facilitated $2 trillion in buying and selling quantity with out a single hack — presents clear, low-cost, and environment friendly buying and selling accessible globally 24/7.
Akin to a PDF file
In its full Wells response, Uniswap Labs rejected the SEC’s assertions that the protocol is an unregistered securities change and that the UNI token constitutes an funding contract.
It argued that the ERC-20 token commonplace it helps is a “common file format for all types of worth.”
The corporate acknowledged:
“A token is a file format, like a PDF. The Protocol is a common goal laptop program that anybody can use and combine, like TCP/IP.”
Uniswap Labs added that, even when the SEC is appropriate that some securities transactions happen on its protocol, the protocol is “nearly solely used for non-securities transactions” involving Ethereum, wrapped Bitcoin, stablecoins, and memecoins.
The SEC has argued that Uniswap is an change managed by Uniswap Labs and that its interface acts as an unregistered broker-dealer.
Nonetheless, Uniswap Labs argues that the SEC’s place is predicated on incorrect assumptions and contends that these claims wrongly equate a digital file format with a safety.
The corporate stated the UNI token was airdropped to 1000’s of customers with out the expectation of revenue from the DEX’s efficiency, which suggests that it doesn’t meet the factors required by the Howey Check.
Uniswap assured in victory
Uniswap Labs CLO Marvin Ammori expressed confidence in Uniswap’s stance, stating on X:
“Now we have a really sturdy case. If pressured to litigate, we’ll win.”
He asserted that Uniswap Labs’ case is “so sturdy that the SEC is attempting to alter the legislation.” Along with describing the file codecs argument, Amorri stated the SEC is working to redefine “change” and different phrases past their present that means.
He stated that courts have dismissed comparable arguments in opposition to Coinbase by discovering that self-custodial wallets don’t meet the necessities to be a dealer.
Uniswap Labs has employed attorneys who’ve received two high-profile instances, together with former SEC enforcement head Andrew Ceresney and former US Solicitor Normal Don Verrilli.
The 2 attorneys represented Ripple and Grayscale in opposition to the SEC, respectively.
The SEC issued a Wells discover to Uniswap Labs on April 10, which indicated that the SEC’s Enforcement Division meant to suggest a lawsuit in opposition to the agency.
In current weeks, the SEC has additionally filed Wells notices in opposition to the Ethereum growth agency Consensys and the retail brokerage Robinhood.
The SEC has not but initiated the anticipated lawsuits in opposition to the three companies. Consensys alone has responded with a preemptive lawsuit.
