Uniswap urges the SEC to drop its initiative to regulate DeFi platforms as exchanges

What’s new? The developers of the leading decentralized crypto exchange (DEX) Uniswap have once again urged the US Securities and Exchange Commission (SEC) to drop its amendments to the 1934 Exchange Act that would have given it the authority to regulate the decentralized finance (DeFi) sector. The SEC first proposed expanding the definition of exchanges to include DeFi platforms back in April 2023.

Source: X.com

What else is known? Uniswap developer company, Uniswap Labs, has repeatedly opposed the initiative and added a new argument to its objection on July 9. For example, the developers cited the Supreme Court’s June 28 decision that overturned the Chevron doctrine, making it no longer necessary for courts to rely on federal agencies to interpret ambiguous laws.

Uniswap said the breadth of the proposed amendment has “no discernible limits” to the public. This means that the SEC would have to continue litigating every single case against a particular crypto firm, resulting in inconsistencies and a lack of clear guidance.

In this way, it will only waste its limited resources, while the court will ultimately disagree with the new interpretation of the law, according to Uniswap Labs. According to the developers, the SEC’s amendments were drafted with already irrelevant laws in mind, and officials should decline to adopt them or at least reopen the comment period so that the public can consider the Supreme Court’s new ruling.

In April of this year, the SEC sent Uniswap a Wells notice signaling that it had found violations and that the commission intended to go to court. At the time, Hayden Adams, the exchange’s founder, said he was “not surprised. Just annoyed, disappointed, and ready to fight.”

Uniswap, like other DeFi platforms, has no central authority playing the role of counterparty between buyers and sellers. The US Treasury Department previously said that regardless of the degree of decentralization of such services, they are bound by law and must be classified as financial institutions under the Bank Secrecy Act (BSA).