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 submit that it’s assured it can come out victorious if compelled into litigation by the SEC. Uniswap Labs stated:
“We’re assured that our work is on the fitting facet of historical past. The SEC mustn’t commit its taxpayer-funded sources to bringing a case towards 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 stated:
“We imagine the SEC ought to embrace open-source expertise that improves on outdated business and monetary methods as a substitute of trying to litigate it out of existence.”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 keep honest, orderly, and environment friendly markets.
Uniswap Labs defended the Uniswap DEX as a significant market innovation that has enabled customers to transact straight 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 — 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 trade and that the UNI token constitutes an funding contract.
It argued that the ERC-20 token commonplace it helps is a “normal file format for all types of worth.”
The corporate said:
“A token is a file format, like a PDF. The Protocol is a normal goal pc 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 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 stated the UNI token was airdropped to 1000’s of customers with out the expectation of revenue from the DEX’s efficiency, which means 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:
“Now we have a really robust case. If compelled to litigate, we’ll win.”
He asserted that Uniswap Labs’ case is “so robust that the SEC is attempting to vary the legislation.” Along with describing the file codecs argument, Amorri stated the SEC is working to redefine “trade” and different phrases past their present which means.
He stated that courts have dismissed comparable arguments towards 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 circumstances, together with former SEC enforcement head Andrew Ceresney and former US Solicitor Common Don Verrilli.
The 2 attorneys represented Ripple and Grayscale towards the SEC, respectively.
The SEC issued a Wells discover to Uniswap Labs on April 10, which indicated that the SEC’s Enforcement Division supposed to suggest a lawsuit towards the agency.
In current weeks, the SEC has additionally filed Wells notices towards the Ethereum improvement agency Consensys and the retail brokerage Robinhood.
The SEC has not but initiated the anticipated lawsuits towards the three companies. Consensys alone has responded with a preemptive lawsuit.
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