DeFi
Uniswap Labs Urges SEC to Reconsider Proposed Changes to DeFi Rules
Uniswap Labs, a decentralized finance (DeFi) platform, has formally requested that the U.S. Securities and Exchange Commission (SEC) reconsider its proposed amendments to the Securities Exchange Act of 1934, aimed at expanding the definition of an “exchange,
The company argues that these changes could go beyond the SEC’s authority over DeFi platforms and could face legal challenges following a recent Supreme Court ruling.
The request comes on the heels of the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which Uniswap Labs said changed the legal landscape. The decision overturned Chevron deference, a longstanding practice that gives government agencies wide latitude in interpreting unclear laws.
Coinbase General Counsel Katherine Minarik explained Uniswap Labs’ key argument that without Chevron’s deference, the SEC’s interpretation lacks a solid legal basis. Uniswap Labs argues that the current law does not cover DeFi platforms and that the court is likely to reject the SEC’s proposed amendments
Today @Uniswap Labs urged the SEC not to move forward with its proposed rulemaking that would dramatically and inappropriately expand the definition of an “exchange” to include DeFi and more.
— Katherine Minarik (@MinarikLaw) July 9, 2024
The challenge comes after the SEC issued a Reviews of wells Uniswap Labs sent out a message in April, indicating a potential lawsuit against the company for allegedly trading securities without proper registration. Uniswap Labs defends itself by saying its platform is just a passive technology, not an exchange as defined by the SEC.
Amid these legal changes, Uniswap Labs is calling on the SEC to reopen discussions on the proposed amendments. The company argues that previous comments were made under outdated legal rules, so new public input is needed to ensure any new regulations align with current legal frameworks.
Uniswap Labs also worries that the proposed amendment could impact innovation in the DeFi sector, which handles trillions of dollars in transactions. They point to previous court cases in which judges were reluctant to apply securities laws to decentralized crypto services.
Despite the challenges, Uniswap Labs remains committed to compliance, prepared to challenge the SEC’s actions that it believes are politically motivated, potentially pursuing legal recourse all the way to the Supreme Court.
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