The SEC investigation of decentralized exchange Uniswap has began. Uniswap Labs claimed to be committed to complying with laws and regulations. Experts say the investigation is not synonymous with an SEC indictment.
The United States Securities and Exchange Commission (SEC) opened an investigation into Uniswap Labs, the company behind decentralized cryptocurrency exchange (DEX) Uniswap.
Lawyers for the regulatory agency are gathering information on how Uniswap works and how crypto assets are traded on the platform. This was reported by “people familiar with the matter” to The Wall Street Journal.
The investigation into DeFi comes days after the SEC signed a contract with a blockchain analytics company, with a view to implementing greater supervision over decentralized finance platforms.
The company AnChain.AI would be in charge of helping the SEC, supervise and regulate the various platforms with financial functionalities.
Faced with the SEC investigation, Uniswap Labs indicated that they are “committed” to complying with the laws and regulations that govern the industry. They also said they were willing to “provide information to regulators that will help them with any queries.”
The investigation is not an accusation
In the opinion of Jake Chervinsky, general counsel at Compound, a decentralized finance platform, the investigation should come as no surprise.
In addition, he clarified that an investigation is not an “accusation of irregularities”, it is only the way in which the SEC “collects information.”
On the other hand, Delphi Labs General Counsel Gabriel Shapiro indicated that DeFi projects are beginning to receive letters from the SEC and inquiries from other regulators.
“Requests for information mean subsequent conversations about how the space works before addressing the question of whether a crime may have occurred and furthermore in the event of a settlement,” Shapiro said.
The lawyer also believes that the SEC’s actions are to “catch up with a space that is growing at a rapid rate” and so they turn to Uniswap, one of the main players in DeFi.
Uniswap users raised their voices
Following the SEC’s decision, users of the Uniswap platform demonstrated through the social network Twitter, since one of the advantages of Uniswap or any DEX so far is precisely being able to act outside the control of regulators.
Among the people who spoke out about it, is Juan Fornell, a member of the Spanish exchange Bit2Me. In that sense, he said that “the investigation that the SEC has opened to Uniswap Labs is an attack on DeFi and the crypto industry in general. My bet is that they will not be able to stop the revolution.
For his part, @jvalladolidga, who describes himself as a “shitcoin trader,” believes that the problem with Uniswap “ends up blocking any American” from the exchange.
«It also doesn’t matter if http://uniswap.org is blocked because the protocol can be accessed from any other interface. And if the SEC decides to hunt down the founders, other anonymous protocols will emerge, “he said.
It is important to remember that Uniswap is a decentralized exchange market that allows exchange operations between any ERC20 token and ether (ETH), without intermediaries and with a commission of just 0.3%.
Any token can be exchanged within this platform, thanks to the fact that any user can open a new market exchange, adding their own ERC20 token to the catalog through a smart contract.
Uniswap can hide tokens
Recently, Uniswap demonstrated that it is a decentralized platform, when it restricted various tokens through its website, however, this decision does not include the Uniswap protocol.
That is, the prohibition of tokens is only at the level of your website, while the code is still open source and the tokens that users want can be added.
The decision was apparently motivated by the actions that the Financial Action Task Force (FATF) has taken on the cryptocurrency market. Also because of what the SEC has commented on the subject, which generated even more pressure in the cryptocurrency market.
DeFi worries SEC chairman
The issue related to DeFi such as Uniswap and others has raised concerns to the president of the SEC, Gary Gensler.
In early August, Gensler said that the concern stems from the new ways in which people are accessing cryptocurrencies through DeFi.
In that sense, he asked the United States Congress to pass legislation that grants legal authority to closely monitor cryptocurrency exchanges, although he assumes that the institution has broad powers.
It is important to remember that many DeFi platforms are not companies, they are simply a smart contract uploaded to the network, sometimes by anonymous developers not registered in any jurisdiction. That would make any regulatory attempt difficult.