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SEC: Uniswap ritiene insensata la regolamentazione della DeFi

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According to Uniswap Labs, the attempt by the SEC to impose DeFi regulation would be weak and wrong. 

This is what they wrote yesterday in a post published on their official blog titled “The fight for DeFi continues”.

DeFi Regulation: The issue between Uniswap and the SEC

Everything originates from the Wells notice that the SEC sent to Uniswap in April.

Questo avviso informava Uniswap Labs che l’agenzia intendeva intraprendere un’azione legale contro di loro. 

According to Uniswap, the SEC claims that the Uniswap protocol is an unregistered exchange controlled by the company Uniswap Labs. 

In reality, the Uniswap protocol is decentralized, and in theory, it should not be controlled by anyone, except by the Ethereum network as a whole, and by the other networks on which it runs. 

However, the SEC also argues that Uniswap Labs acts as an unregistered financial intermediary, and that the token UNI is an investment contract.

Uniswap’s objections to these accusations are that the value represented in a specific digital file format cannot always and in every case be defined as a security, and that the SEC cannot arbitrarily extend the definitions of exchange, broker, and contracts to the point of rendering them meaningless. 

I token vengono paragonati da Uniswap a formati di file, mentre il protocollo viene definito come un programma informatico di uso generale che chiunque può utilizzare e integrare. 

Furthermore, it emphasizes that the hundreds of thousands of users who received UNI tokens for their participation, in the early days, received the token for free, without any contract and without any specific expectation of profit. 

The response of Uniswap Labs to the SEC’s note on DeFi regulation

Uniswap Labs has already sent the SEC a comprehensive legal response to their Wells notice, and in yesterday’s post, it summarized its position for easier understanding.

First of all, they state that they believe the SEC should embrace open source technology, instead of stopping it. In this regard, they also mock the agency, highlighting how its goal should be to “protect investors and maintain fair, orderly, and efficient markets.” 

Instead, their aggressive theories are defined as an effort to expand the jurisdiction of the SEC beyond the exchanges, to communication technology and all markets. 

A tal proposito sottolineano come le loro argomentazioni legali siano talmente deboli da essere già addirittura state confutate dai tribunali. Sottolineano anche che la Camera statunitense potrebbe approvare un disegno di legge che conferirebbe alla CFTC, e non alla SEC, l’autorità per vigilare sul trading di asset digitali.

They believe they are on the right side of history, and they invite the SEC not to dedicate its taxpayer-funded resources to initiate a lawsuit against them.

In the event that the case goes to court, they claim to be ready to fight, having on their side lawyers like Andrew Ceresney, former head of SEC enforcement who has already represented Ripple in the victory against the agency, and Don Verrilli, former United States Solicitor General who represented Grayscale in its bull case won against the agency.

The Uniswap protocol 

Regarding the Uniswap protocol developed by them, they believe it represents an important innovation in the markets, and that it benefits the consumers directly. 

It is an autonomous software that allows users to carry out transactions directly with each other, without intermediaries, without having to pay fees or rely on centralized intermediaries. 

Moreover, this protocol can actually be integrated by anyone with an Internet connection, even without relying on anyone else, not even Uniswap Labs. 

They write: 

“It just works. It has supported a trading volume of 2 trillion dollars without a single hack and has been integrated by thousands of teams and copied thousands of times”.

They also emphasize that many traditional markets are actually neither efficient nor transparent, in addition to the fact that they operate on limited days and hours, sometimes with delays of several days, requiring various intermediaries who charge commissions that increase costs for all users. 

Uniswap invece ha transazioni trasparenti che possono essere verificate da chiunque, la liquidazione è immediata, ed il servizio è disponibile in tutto il mondo 24 ore su 24, 7 giorni su 7. 

They add:

“These properties offer individuals an unprecedented authority to control what they own and create value on the Internet in new ways”.

SEC defeated?

In recent years the SEC has been defeated twice in court by crypto companies. 

First from Ripple, which managed to convince a judge that XRP should not be considered as an unregistered security when traded on the secondary market (the exchanges). 

Following Grayscale, which managed to convince a judge that the SEC’s opposition to the approval of spot Bitcoin ETFs was wrong, after the same agency had instead approved futures ETFs on Bitcoin

Apparently, this week the SEC might be defeated for the third time by the crypto sector, as it seems to be intending to approve the spot Ethereum ETFs, despite claiming that ETH should be considered an unregistered security.

It has always been quite clear that the SEC’s fight against the crypto sector was also a purely political initiative by a part of the United States Democratic Party, around which the current head of the agency Gary Gensler orbits, and given that in November they seriously risk losing the elections, they might have decided on a change of course to avoid losing the crypto electorate. 

The vittima sacrificale at this point should be the same Gary Gensler, on whom the democrats might end up placing the entire responsibility for this failure to try to come out clean in this election year. 

 

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