Uniswap says it has received SEC Wells notice, with charges imminent

By Chris Matthews

CEO of cryptocurrency exchange says he is 'annoyed, disappointed and ready to fight'

Uniswap Labs has received a notice from the Securities and Exchange Commission that it could soon be charged with violating federal securities laws, its CEO Hayden Adams said in a post on X Wednesday.

"I am confident that the products we offer are legal and that our work is on the right side of history," he wrote. "But it's been clear for a while that rather than working to create clear, informed rules, the SEC has decided to focus on attacking long-time good actors like Uniswap (UNIUSD) and Coinbase."

An SEC spokesperson said that the agency "does not comment on the existence or nonexistence of a possible investigation."

Adams said he was not surprised to receive the Wells notice, which informs a person or company that the SEC may soon bring an enforcement action against them.

Instead, Adams said he was "just annoyed, disappointed and ready to fight."

Uniswap is a decentralized cryptocurrency exchange that enables buyers and sellers of cryptocurrencies like ether (ETHUSD) to find each other on a peer-to-peer network that doesn't rely on funds being transferred to a centralized exchange such as Coinbase (COIN).

Industry observers have long wondered how the SEC and other market regulators would approach so-called DeFi protocols. Financial regulations are typically imposed on intermediaries like banks, brokers and exchanges, but DeFi protocols can theoretically run independently of any management by entrepreneurs or engineers.

The agency passed a new rule in February that expanded the government's definition of a "dealer" in such a way that could implicate DeFi exchanges like Uniswap, and last year it reopened public comments on a proposed rule that would expand the definition of an exchange, which could also affect decentralized trading platforms.

Marvin Ammori, Uniswap Labs' chief legal officer, remains confident that the company will prevail in court if the SEC brings an enforcement action, following a March 27 decision by a federal judge in a separate case against Coinbase that the exchange doesn't qualify as a broker.

"We think any broker claims will likely lose for the same exact reasons," Ammori said in a virtual press conference Wednesday.

He added that the Wells notice did not provide specifics as to what sort of charges the SEC intends to bring, and he declined to discuss any negotiations Uniswap Labs has had with the SEC over potentially settling the charges out of court.

-Chris Matthews

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04-10-24 1612ET

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