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U.S. SEC Sends Wells Notice to Uniswap, Plans Legal Action

Despite the legal tension, Uniswap vows to maintain its services and also, challenges the SEC's classification of tokens as securities.

  • Uniswap receives a Wells notice from the SEC, indicating upcoming legal action, yet assures continued product availability and development.
  • Uniswap disputes the SEC's view on tokens as securities, arguing most tokens, including stablecoins and commodities like Ethereum and Bitcoin, are not securities.

The United States Securities and Exchange Commission (SEC) and anything related to crypto doesn’t seem to bond well. In a latest development in this SEC vs crypto saga, one of the world's largest cryptocurrency exchanges, Uniswap, has been hit by the SEC with a lawsuit. 

Uniswap, in a blog post on April 10, stated that it has received a Wells notice from the Enforcement Division of the U.S. SEC, notifying that the SEC is now planning to recommend legal action against the crypto exchange. However, despite the legal tension, Uniswap has assured that its “entire suite of current products will continue to be available,” and it will continue to ship new products.

Additionally, the crypto exchange has further clarified that tokens are not intrinsically securities.

“Despite SEC rhetoric that "most" tokens are securities, the reality is that tokens are a digital file format, like a pdf or spreadsheet, and can store many kinds of value. They are not intrinsically securities, just as every sheet of paper is not a stock certificate. The overwhelming volume of traded tokens are definitively not securities – they are stablecoins, community and utility tokens, and commodities like Ethereum and Bitcoin,” Uniswap stated in its blog post.

Uniswap founder Hayden Adams took it to X (formerly Twitter), sharing his disappointment in the whole matter. Adams said that he’s not surprised; rather, just annoyed, disappointed, and is ready to fight. 

Moreover, according to Uniswap, considering the SEC's persistent legal actions against Coinbase and similar entities, coupled with their refusal to offer clear guidelines or a way to legally register for those legitimately working in the U.S., it appears this is another political move aimed at even the most compliant developers in the blockchain space.

As per a report, following news of a Wells notice from the SEC, the price of Uniswap's UNI token fell by 9% within an hour.

Edited by Harshajit Sarmah