In response to an April Wells notice from the SEC, Uniswap Labs described the agency’s legal reasoning as weak and expressed readiness for a legal battle.
Read more about our response to the SEC’s Wells notice here ⤵️https://t.co/73pTSCkvnp
— Uniswap Labs ? (@Uniswap) May 21, 2024
The Wells notice is a type of letter used by the Commission to inform individuals and companies of legal violations discovered during investigations, which may lead to a civil lawsuit. Recipients have the opportunity to provide information and arguments as to why enforcement actions should not be taken against them.
The SEC’s main allegations include:
- The Uniswap protocol is an unregistered securities exchange controlled by Uniswap Labs;
- The platform’s interface is an unregistered broker-dealer;
- The UNI token is an investment contract.
“These claims suggest that value represented in a certain digital file format is a security and that the SEC can unilaterally expand the definitions of exchanges, brokers, and contracts to the point of absurdity,” the company stated.
As counterarguments, Uniswap Labs noted:
- The token is a file format similar to a PDF, and hundreds of thousands of users who received UNI for early project support did so for free, without profit expectations solely from the team’s efforts;
- The Uniswap protocol is autonomous general-purpose software that anyone with internet access can integrate and use.
Its operation and support do not depend on Uniswap Labs or any other team, the company added.
“The SEC’s aggressive theories represent an attempt to extend its jurisdiction beyond exchanges and communication technologies to all markets beyond securities. Their legal arguments are weak and have been refuted by courts,” the statement reads.
Uniswap Labs emphasized its readiness to “fight,” noting that its lawyers have experience successfully opposing the regulator. Andrew Ceresney, former head of the SEC’s enforcement division, helped Ripple win against the agency. Former Solicitor General of the United States Don Verrilli represented Grayscale in a successful case against the Commission.
Earlier, Uniswap founder Hayden Adams stated that the “all-out war” on the industry by the SEC and Senator Elizabeth Warren is a significant miscalculation by the Biden administration.