Uniswap Investigated By The US Securities And Exchange Commission (SEC), Why?

Uniswap investigated by US regulator, SEC (Vecteezy)

JAKARTA – It was recently reported that the US Securities and Exchange Commission (SEC) conducted an investigation into Uniswap's decentralized trading (DEX). Even so, will Uniswap be the next victim after XRP?

According to the Wall Street Journal, the SEC only investigated Uniswap's DEX developer. The SEC is also reportedly looking into how investors use Uniswap and they are also trying to investigate the Uniswap market.

With the investigation from the SEC, Uniswap Labs said it would cooperate and assist regulators in the investigation process. Although Uniswap has good intentions, the SEC has so far declined to comment on the investigation.

Although the regulator has not yet issued an official statement, it appears that the investigation is a sign for the regulator to tighten its oversight of decentralized finance, also known as DeFi. The effort stems from comments from SEC chairman Gary Gensler.

Gensler believes that while there is no central entity that regulates or is responsible for DEX and the DeFi project that offers incentives to its users, they may fall under SEC regulations.

"There's still a core group of people who don't just design software, like open-source software, but they often have governance and costs," Gansler told the Wall Street Journal some time ago.

The SEC previously filed its first case involving securities using DeFi technology last month, and charged Blockchain Credit Partners with raising $30 million in an alleged "rigged" offering.

Business Insider reported that in July Uniswap Labs had restricted trading of certain digital assets such as stock tokens within the Uniswap app. At that time, Unsiwap Labs stated that even though these restrictions were implemented, the underlying protocol built on ethereum was open-source and would not be affected by these restrictions.

On closer inspection, Uniswap's restrictions were imposed shortly after SEC Chairman Gary Gensler issued a fairly clear statement regarding the likelihood that stock tokens would count as securities. Therefore, the platforms trading them are likely to be breaking the law.

"Make no mistake: It doesn't matter if it's a stock token, a security-backed stablecoin, or some other virtual product that provides synthetic exposure to the underlying security," Gensler told the American Bar Association.

In addition, the SEC Chair assessed both decentralized and centralized finance, both of which are bound by US securities laws.

“These platforms – whether in the decentralized (DeFi) or centralized finance space – are involved by securities laws and must work within our securities regime,” he added.

On the other hand, the price of Uniswap (UNI) tokens has decreased by 1.4 percent in the last 24 hours. UNI ranks 11th crypto asset by market cap, behind Polkadot (DOT) and USDC. UNI is currently trading at IDR 406,647 based on data from CoinMarketCap.

Stay tuned for the latest news regarding the SEC investigation into DeFi Uniswap as well as the ongoing Ripple case.