SEC Concludes Inquiry on Uniswap, Decides Against Pursuing Regulatory Action

The U.S. Securities and Exchange Commission (SEC) has terminated its probe into Uniswap Labs, the Brooklyn-based entity responsible for the decentralized protocol bearing the same name, as per an announcement made by Uniswap on Tuesday.

Last April, Uniswap received a Wells notice from the SEC, which serves as a formal notification to respondents about the charges the regulator intends to file against them. The SEC accused the decentralized exchange of functioning as an unregistered securities broker and unregistered securities exchange, as well as issuing an unregistered security. The company and its executives defended Uniswap's operations in subsequent blog posts and social media posts, vowing to challenge the imminent charges.

Uniswap hailed the SEC's decision to dismiss the charges as a "major victory for DeFi" in a social media post.

"We are grateful that the SEC's new leadership is meticulously examining the ongoing enforcement investigations and litigations across our industry, not just our own, and has acknowledged that there is a more effective approach to safeguarding American consumers. The conclusion of our investigation is not only a welcome and justified relief for Uniswap Labs, but also for the wider DeFi community of builders, users, and developers working towards a better financial system for everyone," Uniswap stated in a blog post on Tuesday.

Amanda Tuminelli, chief legal officer at the DeFi Education Fund, commented to CoinDesk that the SEC's decision to discontinue the investigation into Uniswap Labs "provides DeFi companies with further reassurance to shift from defending to embracing our right to create decentralized technology."

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The SEC's decision to close its investigation into Uniswap Labs is part of a larger trend of dropped investigations into crypto companies, such as Robinhood Crypto and non-fungible token marketplace OpenSea. The SEC has also agreed to drop its case against Coinbase, pending approval from the agency's commissioners, according to the crypto exchange.

The SEC is currently in the process of reforming its approach to crypto regulation. Former Chairman Gary Gensler, known for his "regulation-by-enforcement" approach to the crypto industry, stepped down in January. His replacement, Acting Chairman Mark Uyeda, has made significant changes at the agency – including establishing a new Crypto Task Force under the leadership of crypto-friendly Commissioner Hester Peirce and dissolving the Crypto enforcement unit – indicating a new era for crypto companies in the U.S.

A representative for the SEC declined to provide a comment.

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