Hayden Adams, founder of Uniswap, confirmed on April 10, 2024 that Uniswap Labs received a Wells notice from the US Securities and Exchange Commission (SEC).
Hayden says he is not surprised but just “annoyed, disappointed, and ready to fight.”
Today @Uniswap Labs received a Wells notice from the SEC.
I’m not surprised. Just annoyed, disappointed, and ready to fight.
I am confident that the products we offer are legal and that our work is on the right side of history. But it’s been clear for a while that rather than…
— hayden.eth 🦄 (@haydenzadams) April 10, 2024
For context, a Wells Notice is a notification of a potential / upcoming enforcement action.
When the SEC Enforcement Division issues a Wells notice, the recipient may choose to respond or not provide a response at all. Responding to one is not required / mandatory, and making a substantive disclosure may or may not be in the best interests of a party, depending largely on the circumstances presented.
Hayden says he is “confident that the products they offer are legal and that our work is on the right side of history. 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 and Coinbase. All while letting bad actors like FTX slip by.”
When he first set out to build Uniswap, the goal “wasn’t to reimagine finance,” Hayden explains.
It was an experiment in “radically decentralized, fully automated onchain markets. I didn’t know if it would work or if anyone would use it.”
Fast forward to today, the Uniswap Protocol has “processed over $2 trillion in volume.”
He added that many thousands of teams and developers “have forked our code or built on top of it.” Hayden also mentioned that they “built entirely new financial infrastructure that is transparent, fair, secure, and accessible powering an entire industry.”
The team at Uniswap did all of this in the US from their office in New York City, Hayden claims.
People often ask him why they stay in the US and his answer is simple:
“I believe that blockchain is incredibly powerful technology. Like the Internet, it’s here to stay. So someone needs to figure it out, and it might as well be us. And that when you build technology that improves people’s lives – you don’t need to hide.”
The SEC’s mission is “protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.”
Hayden acknowledges that this is “a noble mission.”
He added that he “would argue Uniswap does a far better job of this today than the SEC.”
He continued:
“Yes, I’m frustrated that the SEC seems to be more concerned with protecting opaque systems than protecting consumers. And that we’ll have to fight a US government agency to protect our company and our industry. This fight will take years, may go all the way to the Supreme Court, and the future of financial technology and our industry hangs in the balance. If we stand together we can win.”
He also noted:
“I think freedom is worth fighting for. I think DeFi is worth fighting for. And of course, we won’t stop shipping. Stay tuned.”
Uniswap chief legal officer Marvin Ammori also noted via X that the regulator’s notice on April 10 had been received.
1/ Today’s Wells notice against @Uniswap is disappointing, but is not unexpected from this SEC
It’s another abuse of power – unsurprising from an SEC that:
Last month, a federal judge ruled committed a "gross abuse of power" by lying in court about a crypto project
— Marvin Ammori (@ammori) April 10, 2024
Ammori said that:
“Today’s Wells notice against Uniswap is disappointing, but is not unexpected from this SEC. If the SEC had authority over our self-custodial, non-intermediated products, it could tell us how to register them. It can’t and so it doesn’t. It has provided no clarity and no guidance — as several SEC commissioners have stated in multiple dissents.”
Uniswap has been supporting automated token exchanges on the Ethereum (ETH) blockchain, enabling clients to swap various cryptocurrency tokens without requiring conventional intermediaries such as centralized exchanges.
Notably, the SEC has been probing Uniswap Labs, Uniswap’s primary developer, since at least 2021. The decentralized exchange has reportedly delisted a number of digital tokens from its platform, while citing increasing regulatory scrutiny.
Uniswap Labs has stated that it is merely the software developer tasked with creating the front-end portal for the app. The front-end is said to be independent from the Uniswap protocol, which is autonomous code published for the general public.
Ammori further noted:
“The Uniswap Protocol, web app, and wallet don’t meet the legal definitions of securities exchange or broker.”
