Another crypto lawsuit is warming up from the United States Securities and Exchange Commission (U.S. SEC). And this time, Uniswap Labs is the target. Will the emerging lawsuit pull through or die before it gets started?
The U.S SEC has issued a Wells notice to Uniswap Labs, the New York-headquartered software company which developed Uniswap Protocol. Uniswap Protocol is the largest Ethereum-based decentralized exchange (DEX) by trading volume. This fresh Wells notice is coming against the backdrop of ongoing lawsuits against a number of leading U.S-based centralized crypto exchanges, including Coinbase.
“…Uniswap Labs received a Wells notice from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC), notifying us that they are planning to recommend a legal action against us,” the announcement from Uniswap read. This development occurred on Wednesday 10 April, eliciting several responses from the Uniswap team and the broader crypto community.
For the uninitiated, a Wells notice is a formal letter issued by the U.S. SEC to inform individuals or companies that the regulatory agency intends to recommend enforcement action against them. A Wells notice provides recipients with an opportunity to respond before any formal charges are filed.
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Uniswap Labs pledge to fight for DeFi.
Responding to the Wednesday Wells notice, Uniswap Labs indicated no interest in a settlement in the potential lawsuit, noting that they are prepared to fight the SEC for decentralized finance (DeFi). The crypto company is confident because its products are not just “legal” but transformative, according to the announcement.
Also citing the victories secured by other crypto companies in similar cases, Uniswap Labs is optimistic about winning the potential SEC lawsuit. Recall that Ripple Labs secured a win over the SEC on 13 July 2023 when a federal judge ruled on XRP as a non-security. Likewise, Grayscale defeated the agency, which contributed to the approval of spot bitcoin ETFs in early 2024.
Notably, Uniswap Labs slammed the Gary Gensler-led Commission over their “complete unwillingness to provide clarity or a path to registration” to crypto companies operating lawfully within its jurisdiction.
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Further, the team stated that the SEC’s plan to sue them is “a political effort to target even the best actors building technology on blockchains.” To this end, Uniswap Labs said: “We’re disappointed that we may have to fight a U.S. government agency to protect innovation and economic freedom.”
Whether the SEC will go ahead to file formal charges against Uniswap Labs is a matter of time. However, in most cases where the agency issued Well notices to crypto companies, a formal charge always comes next. While Uniswap Labs’ legal team is getting ready for the potential legal tussle, the DeFi project assured that its entire suite of current products will continue to be available for users.
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Credit: Ndianabasi Tom A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).
