The US Securities and Exchange Commission (SEC) has allegedly launched an investigation into the world’s largest decentralized exchange, Uniswap.
The Uniswap Labs development team, which supports the activity of this DEX, was targeted by regulators.
Recall that Uniswap is a decentralized exchange protocol that allows you to exchange ERC-20 tokens based on Ethereum. The exchange has practically become a symbol of the rapid development of the field of decentralized finance in the past year. Let’s talk about what is happening in more detail.
Note that the topic of regulatory interference in the life of blockchain-based decentralized platforms was raised the day before by the director of the eToro trading platform Yoni Assia. According to him, the activity of such departments in one way or another can affect the value of the native tokens of such projects, which means that regulators have leverage even in relation to the DeFi niche.
SEC v Uniswap case
According to Cointelegraph , the SEC is interested in information on marketing and investor services for Uniswap. A spokesman for Uniswap Labs has already said that «the team is ready to comply with the laws and requirements of the regulator for oversight of the industry with a commitment to provide all the information it needs. «
An attack on the main decentralized exchange in the course of further negative development could undermine the position of many DeFi projects. Over the past day alone, Uniswap processed nearly $ 1.59 billion in deals . The platform is by a huge margin ahead of the second largest site, PancaceSwap, whose daily volume reaches only 795 million dollars .
Top 5 decentralized exchanges in terms of trading volumes
The news of the Uniswap investigation originally appeared in The Wall Street Journal . At the same time, representatives of the SEC have not yet responded to an official request from other journalists about the interests of the regulator regarding the DeFi sphere. However, the news is still unlikely to be fake: back in July, Uniswap removed dozens of tokens and tokenized shares from its platform, citing pressure from the regulator.
It is worth noting that the Uniswap exchange by itself cannot “shut down” due to the actions of a third party. The startup does not have any governing body that could be completely liquidated. Uniswap relies on decentralization, so sanctions from the SEC in the near future are unlikely to harm the fundamentals of the platform, but activity on it may decrease.
The fact is that Uniswap is essentially a code that interacts with the blockchain and exists inside it. And since the blockchain works at the expense of the network participants, the authorities will not be able to close it if they wanted to. The same applies not only to Ethereum, but also to Bitcoin, Solana and other popular projects.
This point of view was expressed on Twitter by the famous crypto enthusiast Alistair Milne, backing it up with the following quote.
No, the SEC or anyone else cannot shut down Uniswap or other DeFi smart contracts. However, the regulator could simply outlaw it, making interacting with Uniswap as complex as transactions on the darknet. Another option is the recognition of all governance tokens as securities.
Note that the recognition of tokens as securities will end with a ban on their circulation. A similar situation happened with the TON token, which the Telegram developers wanted to launch.
Alistair Milne’s tweet
Many projects have so-called governance tokens for managing its community; they are used for voting on startup development and for staking. In the case of Uniswap, this is the native UNI token , which was distributed last fall to those who interacted with the exchange. Banning UNI will seriously damage the image of the exchange and its management activities. Although the restrictions are likely to once again affect only US residents .
ShapeShift founder Eric Voorhees defended the exchange’s activities. Here is a quote from him, in which he addresses the US Securities and Exchange Commission on Twitter .
Distinguished representatives of the US Securities and Exchange Commission, Uniswap has provided its users with more financial aid through the distribution of coins than the US government has given to its citizens. Moreover, the exchange did it without taxes, debts and cutting down trees for printing checks. Perhaps it is still worth praising their developers, rather than conducting an investigation, which will cost them millions of dollars?
Advertising of the third version of the Uniswap exchange
We believe that despite the lack of direct leverage, decentralized projects in the crypto industry can still face problems due to the actions of government agencies. However, it is important to understand that Uniswap will not be disabled and will not stop working. This can be done only formally, but the existence of the exchange within the blockchain will continue in any case.
