DeFi Exchange Uniswap Receives Enforcement Notice from the SEC

Decentralized crypto exchange Uniswap received a notice from the U.S. Securities and Exchange Commission (SEC) that it intends to pursue an enforcement action, the company disclosed on Wednesday.

Uniswap's native token, UNI, dropped 9.5% immediately after the news.

Uniswap CEO Hayden Adams announced the receipt of the so-called Wells notice on X, saying he wasn’t surprised, “just annoyed, disappointed, and ready to fight.”

Uniswap denies that the tokens it offers for sale are securities, despite the SEC’s position that most tokens besides bitcoin fall under their jurisdiction.

"The reality is that tokens are a digital file format, like a pdf or spreadsheet, and can store many kinds of value. They are not intrinsically securities, just as every sheet of paper is not a stock certificate," the blog post said. "The overwhelming volume of traded tokens are definitively not securities – they are stablecoins, community and utility tokens, and commodities like Ethereum and Bitcoin."

The blog post added that, in cases where a token may in fact be a security, "the SEC has refused to create a path for businesses to register."

Uniswap did not comment further on the matter, aside from directing CoinDesk to Adams' social media post and the company's blog post.
Waiting on Congress

Uniswap argued that the SEC has “no authority from Congress” to oversee the crypto markets, citing SEC Chairman Gary Gensler’s past testimony before Congress that a new law would need to be passed to give the agency the necessary powers to effectively regulate the industry, though Gensler has since argued that the existing securities laws are sufficient for the regulator to police crypto.

Efforts to pass a comprehensive regulatory framework for the crypto industry have stalled, and will likely remain stagnant ahead of the upcoming presidential election.