Uniswap Labs, the innovator behind Ethereum’s leading decentralized trading platform, refuted the US Securities and Exchange Commission’s (SEC) allegations, contending that crypto tokens do not qualify as securities but are akin to file formats such as PDFs.
The New York-based startup rebuffed claims of operating an unregistered exchange and broker-dealer, following a Wells notice served by the SEC’s Enforcement Division last month, signaling potential legal action.
Marvin Ammori, Uniswap Labs’ Chief Legal Officer, emphasized during a Zoom press conference, “Tokens are simply a file format for value and are not inherently securities. The SEC must unilaterally redefine exchange, broker, and investment contracts to encompass our operations.”
In a detailed 40-page response to the SEC, Uniswap Labs asserted that pursuing legal action against them poses risks to the SEC’s authority over crypto tokens. The company expressed readiness to litigate, confident of prevailing.
SEC Chairman Gary Gensler’s stance that decentralized exchanges fall under regulatory oversight has been challenged by Uniswap Labs, which argued that UNI tokens, serving as Uniswap’s governance token, do not meet the Howey Test requirements for investment contracts.
Additionally, Uniswap Labs refuted the classification of LP tokens as securities, clarifying that these tokens function as accounting tools to monitor users’ provided assets and earned fees, rather than serving investment purposes.
Uniswap Labs’ response underscores the ongoing debate surrounding the regulatory status of digital assets and decentralized exchanges, highlighting the evolving landscape of crypto regulation.
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