The decentralized exchange Uniswap has received a Wells notice from the United States Securities and Exchange Commission (SEC), as confirmed by Uniswap’s chief legal officer Marvin Ammori on X (formerly Twitter) on April 10. Ammori expressed disappointment but stated that the notice was expected from the SEC. A Wells notice is a formal notification from the SEC informing a company or individual that enforcement action is recommended against them. It provides the recipient with an opportunity to submit a written explanation or argument, known as a “Wells submission,” to defend against the proposed action.
Uniswap is a platform that facilitates automated token exchanges on the Ethereum blockchain, enabling users to swap various crypto tokens without relying on centralized exchanges. The SEC has been investigating Uniswap Labs, the main developer of Uniswap, since 2021. In response to the regulatory pressure, Uniswap has previously removed several tokens from its platform.
Uniswap Labs has argued that it is solely responsible for developing the front-end portal to the app and that it should not be considered a securities exchange or broker. Ammori emphasized the importance of clear regulations and the rule of law in the crypto industry, rather than arbitrary enforcement and abuse of power.
The SEC has previously issued similar notices regarding legal actions against crypto exchanges Coinbase and Binance. Meanwhile, the European Union is progressing with its Markets in Crypto-Assets (MiCA) regulation for DeFi protocols, including their front-ends. The EU regulator is expected to release a report by December 30, 2024, assessing the feasibility of specific regulations for the decentralized finance market and how decentralized systems should be regulated in the region, especially those without a clear issuer or service provider.
Uniswap, a DeFi protocol, receives Wells notice from SEC.