In the words of Marvin Ammori, the Chief Legal Officer at Uniswap, “Uniswap products comply with US law. We welcome sensible regulations for crypto – and clear rule of law that we expect in the US – not arbitrary enforcement and continued abuse of power.”
Uniswap revealed that the SEC issued a Wells notice to the firm, citing that the regulatory body warns of potential legal action against the crypto exchange.
In the official blog post, Uniswap disapproved of the SEC’s belief that most crypto tokens are securities. The exchange argued that cryptocurrencies are analogous to digital file formats, capable of storing different values.
According to Uniswap, most of the traded crypto tokens are not securities. Instead, these cryptocurrencies have multiple subsets like stablecoins, utility tokens, and even commodities, such as Bitcoin (BTC) and Ethereum (ETH). Referring to Ripple’s (XRP) decisive victory against SEC, Uniswap asserted that secondary market transactions, which comprise the majority of transactions on the exchange, cannot be considered investment contracts.
The exchange also noted that the Uniswap Protocol, web app, wallet, and UNI tokens do not fit the legal definition of a security, adding,
“There is no contract or promise between Uniswap Labs and the [UNI] token's 300,000+ holders. There is no common enterprise and the value of the token is not dependent solely on Uniswap Labs' efforts.”
Although Unswap did not disclose why the SEC sent the Wells Notice to the exchange, it confirmed that this development would not cause any disruptions in the services offered on its platform.
Wells notice is a legal document issued by the SEC to warn an organization before the agency initiates legal action. Uniswap is not the first crypto platform to receive such a notice from the SEC; earlier in 2023, the agency sent Wells notices to Coinbase and Binance within the span of a few days, signaling the start of long legal proceedings against the two exchanges.
