DeFi
Uniswap Labs Urges SEC to Refrain from Adopting Proposed Amendments
Uniswap Labs, the developer behind the Uniswap Decentralized ExchangeUniswap has called on the SEC to drop its proposed DeFi regulation. The request is based on a recent Supreme Court ruling, which Uniswap says limits the SEC’s authority over DeFi platforms and would likely lead to the proposal being rejected.
What is likely to happen next?
Supreme Court decision changes the game
Uniswap’s main argument is based on the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which changed the legal landscape by overturning the Chevron Deference decision. This long-standing practice has given government agencies considerable freedom in interpreting ambiguous laws.
Coinbase’s Chief Legal Officer Katherine Minarik noted that without Chevron’s deference, the SEC’s interpretation lacks a solid legal basis. Uniswap Labs argues that current laws do not encompass DeFi platforms, suggesting that courts would reject the SEC’s proposed amendments. In a recent tweet, Minarik noted, “The SEC and the industry have better ways to spend their resources than on litigation over an illegal rule.”
In April, the SEC issued a Wells Notice to Uniswap Labs, signaling potential legal action. The notice alleged that Uniswap was conducting securities transactions without proper registration as an exchange and broker-dealer. Uniswap Labs defended itself by saying that its protocol operates as a passive technology, not an exchange.
Call for re-evaluation of SEC proposal
Following the Supreme Court’s decision, Uniswap Labs suggested that the SEC revisit its proposed amendments and extend the comment period. They argue that the material change in the legal environment requires renewed public participation, as the initial comments were made under the now-invalid assumption of deference to Chevron.
Uniswap stresses the importance of ensuring that new regulations are consistent with the current legal framework and do not exceed the limits set by Congress. They also argue that the proposed amendments could hamper innovation and create legal uncertainties, which could impact the DeFi sector, which handles trillions of dollars in transactions.
Despite these challenges, Uniswap remains committed to the law. Uniswap Labs is prepared to challenge the SEC’s actions, which it considers politically motivated, and is ready to take the fight to the Supreme Court if necessary.
Also see: Bitwise Faces $2 Million Lawsuit: Executives Accused of Defrauding Investors
Will the SEC vs. DeFi battle head to the Supreme Court? Stay tuned.