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DeFi platform Uniswap Labs responded on Tuesday to the Securities and Exchange Commission, which had notified the company last month that enforcement actions were imminent.
In a 43-page submission, Uniswap made its case to the SEC on why the regulator should not take legal action against them. Uniswap last month revealed it has been served a Wells notice, which typically precedes an SEC enforcement action.
Uniswap is not an exchange, the company stated in its response to the SEC. It emphasized that the SEC lacks the authority to regulate bitcoin, ether or stablecoins, which are the primary assets traded on the Uniswap protocol.
Read more: SEC signals to Uniswap that enforcement actions are looming
Uniswap argued that tokens traded on its platform are not securities but rather alternative assets such as stablecoins, community and utility tokens, and commodities. Uniswap also pointed out that — per its decentralized nature — the protocol does not maintain user accounts or collect personal data, complicating the SEC‘s push for increased transparency and regulatory oversight.
“Bringing this case would encourage Americans to use harder-to-regulate foreign interfaces and trading protocols, while also discouraging future innovators from attempting to foster new ideas that bring much needed competition and innovation to financial and commercial markets,” Uniswap wrote in the submission.
Uniswap added that Congressional intervention is needed to regulate the crypto industry, and the SEC “cannot obtain its desired answers through litigation.”
Read more: Empire Newsletter: A busy crypto lawsuit season looms
Uniswap’s response comes a month after Consensys preemptively sued the SEC after receiving its own Wells notice. In the suit, the crypto company alleges the securities regulator overstepped its authority and failed to provide regulatory clarity for the industry.
Consensys claims the SEC has been investigating Ethereum and ether’s potential status as a security for over a year. The crypto firm claims that SEC director of the division of enforcement Gurbir Grewal in March 2023 approved a Formal Order of Investigation into the buying and selling of ether. Formal Orders allow the agency to issue subpoenas and collect witness testimony under oath.
Uniswap’s response also follows news that exchange Robinhood was served a Wells notice earlier this month. The US securities regulator is interested in Robinhood Crypto’s “cryptocurrency listings, custody of cryptocurrencies, and platform operations,” in addition to “other topics.”
“The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities,” Robinhood said earlier this month.
The SEC has declined to comment on both Uniswap and Robinhood’s Wells notices and any pending enforcement actions.