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On Wednesday, Uniswap Labs the decentralized exchange behind Uniswap announced in a blog post that it had been served with a Wells notice by the U.S. Securities and Exchange Commission. The DeFi giant said it was prepared to fight the notice, and other crypto community members backed its decision.
On Wednesday, Uniswap served with a Wells Notice from the Securities and Exchange Commission (SEC) as the regulator continues its investigation into the biggest decentralized exchange in the world. What is a Wells Notice? A Wells Notice is a document sent by the SEC to a person or company that the SEC intends to pursue legal action against as a result of findings made in an ongoing investigation The Notice allows the person or company to explain in writing why the SEC shouldn't proceed with its action.
The Notice allows the individual or entity to submit written testimony to the SEC as to why it shouldn't take action. The Uniswap case is just one in a long line of crypto platforms that I've been scrutinized by the SEC."The uni swap protocol, the web app, and the wallet don't qualify as securities exchange or broker," Ammori said. "If the SEC had jurisdiction over our self-curated, non-intermediary products, it could dictate how we register them. Unfortunately, it doesn't."
The Wells notice is the second in as many years. In 2021, the Securities and Exchange Commission (SEC) opened an investigation into uni swap. The DEX has already removed several tokens from its list in response to regulatory pressure in the past. Following the SEC's announcement on Wednesday, uniswap's founder, Hayden Adams, responded to the SEC in a blog post on the X. Labs, however, has maintained that the company's products "are compliant with the law."
The crypto community reacts Since the suit was filed; the crypto community has been vocal in its support of uniswap. The Decentralized Finance giant is expected to win the case. Dan Robinson, Managing Director at Paradigm Investment, said in a statement, "Since the very first day of crypto, uniswap's been advocating for the fundamental principles of crypto. The SEC is forcing the company to take this fight to court, and DeFi couldn't have asked for a more worthy adversary." In addition to Robinson, many other prominent crypto figures have weighed in on the case, including: Jake Chervinsky (Chief Legal Officer at Variant Fund) Ryan Sean Adams (host of the Bankless podcasts) The largest DEX.
However, John Reed Stark, a former SEC official, has taken issue with Uniswap's founder's public criticism of the securities regulator. "These ill-advised attempts to gin up the crowd almost always backfire," Stark wrote in a recent X post. The crypto market will be in for a wild ride in the coming weeks, as the SEC's action against Uniswap arrives just eight days ahead of the Bitcoin halving event.
