Uniswap Labs, associated with the DEX Uniswap, has urged the SEC to abandon its proposal to regulate the DeFi sector, citing a recent U.S. Supreme Court decision.
Both the SEC and the industry have better ways to spend their resources than in litigation over an unlawful rule. Our letter to the SEC is here: https://t.co/yAltMdmD3e. 3/3
— Katherine Minarik (@MinarikLaw) July 9, 2024
In April 2023, the Commission proposed expanding the definition of “exchange” in the 1934 Act to include cryptocurrency market participants in DeFi. Uniswap was among those who opposed this.
On June 28, in the case of Loper Bright Enterprises v. Raimondo, the Supreme Court ruled that lower courts are no longer required to defer to federal agencies when interpreting “ambiguous” laws.
According to Uniswap, this means the SEC would merely waste “limited resources” attempting to change the definition of “exchange,” which was “unlikely to lead to a positive outcome” even before the Supreme Court’s decision.
Company representatives also noted that the “lack of visible boundaries” in the proposed amendments would force the agency to litigate each case individually. This would result in inconsistency and a lack of clear guidance.
“For these reasons, the Commission should not adopt the proposed amendments. They are based on a legal framework that no longer exists,” the statement reads.
Uniswap Labs suggested reopening the comment period on the SEC’s initiative to allow stakeholders to consider the recent Supreme Court decision.
Back in April 2024, Uniswap Labs received a warning from the agency about a potential lawsuit.
A month later, the company described the SEC’s legal reasoning as “weak” and expressed readiness for legal confrontation.