The SEC has sent a “Wells notice” as it continues its attack on the cryptocurrency space
Decentralized exchange (DEX) Uniswap has recently been issued a Wells notice from the US Securities and Exchange Commission (SEC). It’s the latest move by the securities regulator against the cryptocurrency space, although the attack will most likely lead nowhere.
Uniswap chief legal officer Marvin Ammori confirmed the SEC’s notice in an X (formerly Twitter) post on April 10. “Today’s Wells notice against Uniswap is disappointing, but it is not unexpected from this SEC,” wrote Ammori.
1/ Today’s Wells notice against @Uniswap is disappointing, but is not unexpected from this SEC
It’s another abuse of power – unsurprising from an SEC that:
Last month, a federal judge ruled committed a "gross abuse of power" by lying in court about a crypto project
— Marvin Ammori (@ammori) April 10, 2024
“If the SEC had authority over our self-custodial, non-intermediated products, it could tell us how to register them. It can’t and so it doesn’t. It has provided no clarity and no guidance — as several SEC commissioners have stated in multiple dissents,” he added.
The SEC can issue a Wells notice to a company or individual if its staff is weighing whether to suggest enforcement efforts against them. The recipient can provide a written argument, called a “Wells submission,” allowing them to explain why the regulator should not take action.
Uniswap facilitates automated token exchanges on the Ethereum blockchain. Users can swap various crypto tokens without dealing with centralized exchanges or other intermediaries.
The SEC has been investigating Uniswap Labs since 2021. The DEX cited regulator pressure as the motivation for previously delisting several tokens from its offerings. Uniswap Labs previously defended itself by claiming that it only develops software to build the app’s front-end portal, which is separate from the Uniswap protocol available to the public.
“The Uniswap Protocol, web app, and wallet don’t meet the legal definitions of securities exchange or broker,” remarked Ammori, adding that the protocol embraces “regulations for crypto — and clear rule of law that we expect in the US — not arbitrary enforcement and continued abuse of power.”
The SEC previously issued warnings to crypto exchanges like Coinbase and Binance, threatening legal action.
