Uniswap’s three-year legal battle with the U.S. Securities and Exchange Commission (SEC) has finally come to a happy ending. Followed by a short-term upswing in Uniswap’s native UNI token price, the decision to cease investigation activities signals a drastic regulatory shift for decentralized finance (DeFi) in hopes of a more comprehensive framework.
SEC Backs Off Uniswap, DeFi Wins Big
Representatives of the financial regulator assured Wall Street Journal that SEC “doesn’t plan to move forward with any enforcement actions” in regards to Uniswap Labs. This has sparked a positive reaction from prominent figures in the space, including the founder of the largest DeFi exchange himself.
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According to Uniswap CEO Hayden Adams, traditional financial regulations are not designed to work on DeFi, therefore a new set of rules must be created. Originally, the SEC accused UniSwap Labs of conducting operations without registration as an exchange, clearing agent and broker.
These allegedly unregistered activities discussed in the Wells Notice last April were the focus of a long-year probe under former SEC Chair Gary Gensler’s ruling. However, the probe took the U-turn on indicting Uniswap Labs since the new leadership took a completely different approach on the uprising of the crypto & blockchain industry.
SEC Assembles New Crypto Task Force
Namely, the newly-appointed Acting Chairperson Mark T. Uyeda established a “Crypto Task Force” to cooperate with crypto companies targeted by the previous team. Distancing themselves from Biden administration’s tight grip on crypto, Mr. Uyeda’s “Crypto 2.0” speech gave a clear understanding that the crypto-specialized team aims to solve “long-standing uncertainties in crypto regulation” and deliver a more consistent enforcement strategy.
On The Flipside
- The major victory for the DeFi sector didn’t reflect on Uniswap’s (UNI) price, despite growing 140% in trading volume after the announcement.
- The U.S. Securities and Exchange Commission’s push to restore cooperation with the crypto industry bore fruit in other recently dropped cases.
- In a week’s time, the newly-assembled SEC dropped similar probes against Robinhood, Coinbase & the largest NFT marketplace, OpenSea.
Why This Matters
Being one of the household names in DeFi, Uniswap’s cooperation with the largest regulatory body in traditional finance can pave the way for a smoother adoption of crypto & blockchain tech.
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