The Securities and Exchange Commission of the United States has opened an investigation into Uniswap Labs, the team behind the world’s most popular and largest decentralised exchange by trade volume.
SEC enforcement attorneys are searching for information on how investors use Uniswap and how developers advertise it, according to the Wall Street Journal. Uniswap Labs responded by saying it is “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.” There are no official allegations that have been made and the inquiry is still in its infancy.
Many decentralised exchanges (DEXs) claim to be exempt from registration with regulators since they don’t have a central organisation. There’s no one single entity that decides which tokens are traded via the network, rather it’s the users who make that decision. The SEC, on the other hand, appears to be up to something regarding the fledgling DeFi ecosystem.
SEC Chairman Gary Gensler stated last month that DeFi initiatives are not free from regulatory scrutiny. DEXs may be controlled by developers or intermediaries despite functioning on a distributed network without a central server. Incentives such as trading fees or native tokens, which grant holders governance rights, might benefit these parties.
“There’s some incentive structure for those promoters and sponsors in the middle of this,” according to Gensler, which he believes should be regulated. The SEC, according to Gensler, will focus on exchanges that allow for the trading and production of digital assets. This is particularly true for those who must register with the Securities and Exchange Commission (SEC).
In addition, the SEC’s enforcement office recently sent letters to a number of firms, requesting details on their crypto lending services. The investigators wanted to know about quarterly sales and the company’s founders. They also wanted to know whether there had been any research done on the status of native tokens as securities.