Media: SEC widens investigations into several DeFi firms

The SEC’s investigation into Uniswap Labs is part of a broader initiative aimed at the DeFi sector. The Defiant reports this, citing an informed source.

According to The Wall Street Journal, SEC investigators are examining information about Uniswap and the ways investors interact with it. The publication suggested that the investigation is at an early stage and that no charges have yet been filed.

Notably, the WSJ described this as an investigation. According to the regulator’s site, this procedure does not necessarily lead to enforcement actions; however, under its framework the SEC may, for example, summon witnesses to testify in court.

According to The Defiant, Uniswap Labs is not the only sector participant under regulator scrutiny. The commission is allegedly conducting a wide-ranging investigation into a range of DeFi-platforms.

In an interview with The Block, Delphi Labs’ chief legal officer Gabriel Shapiro also stated that projects in the DeFi space “are starting to receive letters from the SEC and requests from other regulators”.

“Lawyers in the space have known about and been talking about this for about a month. … It is all simply becoming public now,”

added.

Later, The Block analyst Frank Chaparro clarified that the letters were sent to firms that allow users to lend out their cryptocurrency to earn yields.

Separately, apparently the SEC has sent multiple letters to firms that allow users to lend out their crypto for yield. So this Uniswap thing seems like it is part of a wider examination in crypto vs a UNI specific thing

— Frank Chaparro (@fintechfrank) September 4, 2021

According to The New York Times, the SEC undertook similar actions in 2017-2018 against ICO organizers. In that period, within a few months the regulator sought information from ‘dozens of people and companies’ connected with public offerings.

Not all members of the community regard the SEC’s investigation of Uniswap Labs as an ‘attack on the entire industry,’ as described by yEarn.Finance’s lead developer, known as banteg. Ethereum developer Vlad Zamfir noted that this is not the same thing.

Uniswap Labs is a Silicon Valley VC funded New York startup, it is not Uniswap. https://t.co/Ne92tdiO0H

— Vlad Zamfir (@VladZamfir) September 3, 2021

“Uniswap Labs is a New York startup funded by Silicon Valley venture capital firms; this is not Uniswap,”

Zamfir emphasised.

During a recent appearance before the European Parliament, SEC Chair Gary Gensler described DeFi users as ‘vulnerable’. He said the space ‘is rife with fraud, scams and abuses’.

Earlier in August, Gensler warned of intensified DeFi regulation and stressed that the decentralized nature of projects does not confer immunity from the regulator’s oversight.

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