Uniswap Labs Responds to SEC Notice
Uniswap Labs, the creator of the Uniswap protocol, has publicly responded to the Wells notice it received from the U.S. Securities and Exchange Commission (SEC) last month. The company has expressed its belief that the SEC should embrace open source technology that improves on outdated commercial and financial systems, rather than attempting to litigate it out of existence, according to a blog post on the Uniswap website.
Arguments Against SEC’s Allegations
Uniswap Labs refutes the SEC’s aggressive theories, which it views as an attempt to expand the Commission’s jurisdiction beyond exchanges to communications technology, and beyond securities to all markets. The company asserts that the SEC’s legal arguments are weak and have been refuted by courts.
The Uniswap protocol, an autonomous software, allows users to transact directly with each other without relying on centralized intermediaries or paying fees to them. The protocol has supported $2 trillion in trading volume without a single hack and is integrated by thousands of teams. Uniswap Labs argues that the protocol provides secure, low-cost, and transparent infrastructure that aligns with the SEC’s mission of protecting investors and maintaining fair, orderly, and efficient markets.
The SEC’s Assertions and Uniswap’s Response
The SEC has asserted that the Uniswap Protocol is an unregistered securities exchange controlled by Uniswap Labs, that the Uniswap interface is an unregistered securities broker-dealer, and that the UNI token is an investment contract. In response, Uniswap Labs states these assumptions extend the definitions of exchanges, brokers, and contracts to the point of meaninglessness. The company maintains that a token is a file format, like a PDF, and the protocol is a general-purpose computer program that anyone can use and integrate, like TCP/IP.
Prepared for Legal Battle
Despite the looming legal challenge, Uniswap Labs remains confident and prepared to fight the SEC’s allegations. The company’s legal team includes Andrew Ceresney, a former head of enforcement at the SEC, who represented Ripple in their victory over the SEC, and Don Verrilli, a former U.S. solicitor general, who has argued more than 50 cases before the U.S. Supreme Court and represented Grayscale in its successful case against the SEC.
While the legal battle unfolds, Uniswap Labs plans to continue building and improving its protocol, defending the right to use and distribute general-purpose code that challenges incumbents to upgrade, adapt, and compete.
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