- The US Securities and Exchange Commission is investigating Uniswap Labs, the developer of the world’s largest decentralized financial platform.
- The Wall Street Journal reports that the regulator is looking for information about Uniswap’s marketing and investor services.
The US Securities and Exchange Commission has launched an investigation against Uniswap, the world’s largest decentralized financial platform. According to a report in the Wall Street Journal, the SEC is investigating Uniswap’s marketing and investor services. The investigation comes a month after SEC chief Gary Gensler declared his agency to be responsible for DeFi platforms.
Uniswap is an Ethereum-based decentralized exchange that enables customers to exchange Ethereum-based tokens. In contrast to exchanges such as Binance and Coinbase, there is no central authority at Uniswap. Uniswap has risen to become the undisputed leader in DEX, and even competes with some centralized exchanges in terms of trading volume. Uniswap also boasts of having a total value of $ 2.9 billion.
Turnover in the past 24 hours was $ 1.62 billion, more than Bithumb, Kraken, Bitfinex and Binance.US.
Although Uniswap is decentralized, it is now the SEC’s target. According to sources who wish to remain anonymous, the regulator is looking for information on “how investors are using Uniswap and how it is being marketed.”
New scoop:@SECGovis investigating@UniswapLabs, the startup behind the biggest DeFi exchange. We also report SEC Enforcement is sweeping crypto lending platforms for information. https://t.co/GT05Q0W8H9
– Dave Michaels (@davidamichaels) September 3, 2021
The SEC has declined to respond to media inquiries, including those from the Wall Street Journal, and stated that it neither confirms nor denies such reports. Meanwhile, a spokesman for the exchange told the Wall Street Journal that it is “committed to complying with the laws and regulations that govern our industry and providing information to regulators that will assist them in their investigations.”
Expert: SEC cannot turn off DeFi
With the investigation into Uniswap, the SEC made it clear for the first time that it intended to regulate the DeFi sector. Since its inception a few years ago, the DeFi sector has been believed not to fall under the purview of the SEC, as platforms like Uniswap are by definition decentralized.
However, regulatory pressure has expanded on DeFi. In July, Uniswap removed 100 tokens from its app interface, the front-end web app portal. However, these tokens remained on the Uniswap protocol, which is completely autonomous, permission-free and immutable.
When delisting the tokens, the platform indicated that this was due to regulatory pressure and stated that it would “monitor the evolving regulatory landscape”.
More on the subject: Uniswap restricts access to tokens in an “evolving regulatory landscape”
A few weeks later, SEC chief Gary Gensler gave an interview in which he told the Wall Street Journal that DeFi platforms have characteristics that make them look like the kind of companies regulated by the SEC. He explained:
“There is still a core group of people who not only write the software, as is the case with open source, but often also take over the management and the fees. There is a certain incentive structure for these promoters and sponsors in the middle of it all. “