Uniswap is under investigation by the US Securities and Exchange Commission (SEC), according to a report by Reuters.
Uniswap is a DeFi leader and is said to be the largest decentralized digital asset exchange in operation. The Uniswap protocol facilitates crypto trading by utilizing smart contracts on the Ethereum blockchain in a peer-to-peer manner. This stands in contrast to the traditional intermediary structure for securities.
Uniswap claims over $386 billion in trade volume, 1.5 million users, and more than 60 million trades. The most recent 24-hour volume stood at $343 million. Uniswap has also issued a native UNI token.
In some ways, Uniswap is emblematic of the concept of DeFi that seeks to eliminate the middle-man, and affiliated costs, in financial transactions.
The report arrives at a time when regulatory scrutiny of crypto exchanges, and digital assets in general, is rising. Current SEC Chairman Gary Gensler has targeted crypto exchanges, regardless of jurisdiction, as a point of enforcement interest. Gensler is of the opinion that crypto exchanges represent a heightened point of risk when it comes to individual investors.
Uniswap has not yet commented on the report.
A Uniswap representative emailed that “the company is committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.”
Gensler recently forwarded a letter to Senator Elizabeth Warren, a member of the Senate Banking Committee, requesting additional authority to regulate the fast-growing digital asset ecosystem that has lacked bright-line rules, challenging federal authorities. At least one elected official has criticized Gensler’s approach to increasing the SEC’s oversight remit.