SEC serves DeFi giant Uniswap with Wells notice as project vows to fight

After three years of investigation, the US SEC issued a Wells notice to Uniswap Labs.
Uniswap founder Hayden Adams vows to fight for Uniswap as he says the protocol does a better job than the SEC.
Crypto community members show support for Uniswap after the Wells notice from the SEC.

Uniswap Labs, the entity behind the decentralized exchange Uniswap, confirmed in a blog post on Wednesday that it received a Wells notice from the US Securities and Exchange Commission (SEC). The DeFi giant has said it is ready to fight, while other crypto community members have expressed support for their decision.

Uniswap receives Wells notice

Uniswap was on the receiving end of a Wells notice from the SEC on Wednesday as the regulator is looking to crack down on the largest decentralized exchange.

A Wells notice is a document the SEC sends to individuals or companies that it intends to take legal action against due to discoveries uncovered during an investigation. The notice allows the individual or company to provide a written response on why the SEC shouldn't proceed with their actions.

"Today's Wells notice against @Uniswap is disappointing, but is not unexpected from this SEC," said Marvin Ammori in an X post on Wednesday.

Uniswap is the latest in the long list of crypto platforms that have come under regulatory scrutiny by the SEC. Ammori pointed to instances where judges ruled against the SEC in similar crypto cases like Ripple, Coinbase, and Grayscale. "The Uniswap Protocol, web app, and wallet don't meet the legal definitions of securities exchange or broker (...) If the SEC had authority over our self-custodial, non-intermediated products, it could tell us how to register them. It can't, and so it doesn't," stated Ammori.

Also read: UNI price fills up a triangle as Uniswap fee switch proposal starts

The Wells notice comes about three years after the SEC opened investigations into Uniswap in 2021. Consequently, the DEX had previously delisted several tokens, citing regulatory pressure.

After the SEC's move on Wednesday, Uniswap founder Hayden Adams responded to the regulator in a post on X.

Today @Uniswap Labs received a Wells notice from the SEC.

I’m not surprised. Just annoyed, disappointed, and ready to fight.

I am confident that the products we offer are legal and that our work is on the right side of history. But it’s been clear for a while that rather than…
— hayden.eth (@haydenzadams) April 10, 2024

Uniswap Labs has also expressed confidence that their products "are on the right side of the law" despite the Wells notice.

Crypto community reacts

Many crypto community members have expressed their support for Uniswap since the suit and expect the DeFi giant to prevail.

Dan Robinson of Paradigm Investment commented, "Uniswap has been fighting for the core principles of crypto since they launched (...) It's unfortunate that the SEC is forcing them to take that fight to the courts, but DeFi couldn't have hoped for a better champion." Among many others, Jake Chervinsky, Chief legal officer at Variant Fund, and Ryan Sean Adams, host of Bankless podcasts, have also made posts showing their support for the largest DEX.

However, former SEC official John Reed Stark has criticized Uniswap and its founder's move to criticize the securities regulator publicly. "Such futile attempts to rally the mob pretty much always backfire," he stated in an X post.

SEC Sends Wells Notice to Uniswap. Not Surprising.

However, I am always amazed when SEC Wells Notice recipients fight back by throwing stones at the SEC with obnoxious/insulting PR campaigns, like the one Uniswap seems to have begun. Such futile attempts to rally the mob pretty… pic.twitter.com/3oUti4LQ9m
— John Reed Stark (@JohnReedStark) April 10, 2024

The coming weeks will prove interesting for the crypto market, as the SEC's notice to Uniswap comes barely eight days before the Bitcoin halving.

Uniswap is trading at $9.46 on Wednesday, down 13.9% in the past 24 hours.

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