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 mentioned in a Could 20 weblog submit that it’s assured it can come out victorious if compelled into litigation by the SEC. Uniswap Labs mentioned:
“We’re assured that our work is on the precise facet of historical past. The SEC shouldn’t commit its taxpayer-funded sources 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 courtroom.
The corporate mentioned:
“We consider the SEC ought to embrace open-source expertise that improves on outdated business and monetary methods as an alternative of making an attempt to litigate it out of existence.”
It additionally highlighted that the Uniswap Protocol aligns with the SEC’s mission to guard buyers and preserve truthful, orderly, and environment friendly markets.
Uniswap Labs defended the Uniswap DEX as a significant market innovation that has enabled customers to transact immediately with out counting on centralized intermediaries. It added that the protocol — which operates autonomously and has facilitated $2 trillion in buying and selling quantity and not using a single hack — affords 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 trade and that the UNI token constitutes an funding contract.
It argued that the ERC-20 token customary it helps is a “normal file format for all types of worth.”
The corporate acknowledged:
“A token is a file format, like a PDF. The Protocol is a normal function pc program that anybody can use and combine, like TCP/IP.”
Uniswap Labs added that, even when the SEC is right 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 trade managed by Uniswap Labs and that its interface acts as an unregistered broker-dealer.
Nevertheless, Uniswap Labs argues that the SEC’s place relies on incorrect assumptions and contends that these claims wrongly equate a digital file format with a safety.
The corporate mentioned the UNI token was airdropped to hundreds of customers with out the expectation of revenue from the DEX’s efficiency, which suggests that it doesn’t meet the standards required by the Howey Check.
Uniswap assured in victory
Uniswap Labs CLO Marvin Ammori expressed confidence in Uniswap’s stance, stating on X:
“We now have a really sturdy case. If compelled to litigate, we’ll win.”
He asserted that Uniswap Labs’ case is “so sturdy that the SEC is attempting to vary the legislation.” Along with describing the file codecs argument, Amorri mentioned the SEC is working to redefine “trade” and different phrases past their present which means.
He mentioned 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 legal professionals who’ve gained two high-profile circumstances, together with former SEC enforcement head Andrew Ceresney and former US Solicitor Basic Don Verrilli.
The 2 legal professionals 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 advocate a lawsuit in opposition to the agency.
In latest 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 corporations. Consensys alone has responded with a preemptive lawsuit.