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The SEC Won’t Stop Staring at Uniswap
There’s always an old friend picking up fights with everyone. Dissing random strangers once in a while, or worse, taking whoever crosses their path to court whenever it suits them. That friend is the Securities and Exchanges Commission (SEC). Apparently, the commission has already made its point by now to be the chief sworn enemy of DEFI. For us at the HODL, you don’t make a billion dollars without making a few foes.
Related: Uniswap Plans to Roll Out a New Version Following Ethereum’s Dencun Update
This is the case at Uniswap Labs after the United States SEC issued the decentralized exchange with a Wells Notice on 10th April. Mr. Marvin Ammori, Uniswap’s chief legal officer confirmed the news on X saying as disappointing as the news is, the SEC was always an expected visitor.
A Wells Notice requires the recipient to provide a written submission that explains why the commission should not take any legal action against the entity. This written explanation is called the Wells Submission. Apparently, the SEC has been investigating Uniswap since early 2021.
Uniswap, a DEX for providing automated token swaps across the Ethereum ecosystem, has previously cited increasing regulatory pressure as the reason behind delisting various tokens. In their defense, Uniswap Labs has stated before that their work is only operating a front-end software portal for people interacting with tokens. This front-end portal is different and separate from the protocol, which runs on self-executing smart contracts that are available for public use.
Ammor further added that the protocol, the web application, and the wallet do not meet the SEC’s legal definition of exchange, securities, or broker. Hence, the commission’s arbitrary enforcement of law without setting out clear cryptocurrency rules is a blatant abuse of power.
This is not the first time the SEC has issued such a notice. The commission is already embroiled in a fierce legal battle with Coinbase and Binance. These lawsuits have not sat well with the tech community. Many claim the United States is on its way to cripple innovation in the country. It seems they are indirectly signaling Gary Gensler to borrow a leaf from the financial regulators across the European Union who have already embraced crypto assets and are working day and night to build effective policies for decentralized finance (DeFi).
Compliance Climate in the European Union is Good for Business
Markets in Crypto Assets (MiCA), the main regulatory framework for the European Union, will release a report by the end of this year that details the feasibility of various crypto regulations in the digital assets markets. This report is the first of its kind and is aimed at reaching a consensus toward the best approach to enforcing compliance across the ecosystem.
More on SEC:
Yes, we know. It is such an inspiring leaf to borrow but everyone still hopes Gary Gensler, the SEC chief can see that too.
Upon the news, Uniswap’s 24-hour trading volumes dropped by 46.76%. The UNI token is changing hands at $9.12, and the market capitalization is $5.462 billion.
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