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Uniswap Fires Back at SEC’s Wells Notice, Calls Out ‘Weak’ Legal Arguments

Shalini Nagarajan
Last updated: | 1 min read
Uniswap SEC

Uniswap Labs filed a 40-page response on Tuesday to the SEC’s Wells Notice, arguing against a potential lawsuit and urging the agency to drop the matter.

It comes after the agency raised concerns a few weeks ago that Uniswap’s operations might violate US securities laws. The decentralized crypto exchange is now explaining in detail why the SEC could be wrong.

Uniswap serves as a decentralized finance (DeFi) platform catering to developers, traders, and liquidity providers. But the SEC claimed that Uniswap Protocol operates as an unregistered securities exchange under Uniswap Labs’ control, while labeling the Uniswap interface as an unregistered securities broker-dealer, and the UNI token as an investment contract.

SEC Should Not Waste Taxpayer Money on This Case: Uniswap


Uniswap hit back, stating that the SEC’s legal assertions are “weak” and have been contradicted by court rulings.

The crypto marketplace argued that the agency is stretching the definitions of securities, exchanges, and contracts to an unreasonable point. It also said the SEC’s accusations hinge on the idea that any value stored in a digital format can be considered a security.

“We’re confident that our work is on the right side of history,” Uniswap said. “The SEC should not devote its taxpayer-funded resources to bringing a case against us.”

Most Users Outside SEC’s Jurisdiction, Uniswap Claims


Uniswap argued that most trading on its platform doesn’t involve securities, even by the SEC’s own standards. It pointed out that a large portion (65%) of its trading volume involves assets the SEC itself has admitted aren’t securities, like Ether, wrapped Bitcoin, and stablecoins.

Additionally, the protocol argued that US securities laws wouldn’t apply to most users since it estimate 75% of them are from outside the US.

The marketplace said that even if a few security-like transactions took place on its platform, it isn’t a securities exchange. It said a court wouldn’t see it that way because the platform wasn’t built specifically for those transactions.

The federal regulator has aggressively sent Wells notices, filed lawsuits, and settled with numerous crypto companies. Its focus is shifting towards Ethereum and DeFi (Decentralized Finance) players, with ShapeShift, TradeStation, Uniswap, Consensys all facing legal action. The Ethereum Foundation is also reportedly under investigation.