The U.S. Securities and Exchange Commission (SEC) is reportedly pushing through with an investigation on Uniswap Labs, the makers of the Uniswap ($UNI) protocol, a decentralized exchange.
According to initial reports from the Wall Street Journal, the investigations were neither confirmed nor denied by a spokesperson from the SEC. On the other hand, a representative from Uniswap Labs stated that they are “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.”
The report suggests that the civil investigation on Uniswap Labs appears to be in the early stages, and hence may not “produce any formal allegations of wrongdoing.”
Nevertheless, the SEC’s Gary Gensler has previously warned of the agency’s position, that while crypto, and DeFi (decentralized finance) may “continue to be a catalyst for change in the fields of finance and money,” these sectors weren’t immune to regulatory scrutiny. Gensler says that crypto and DeFi regulation was necessary to “guard against illicit activity, and ensure financial stability.”
Prior to these comments, Gensler also added that platforms such as those built on top of the decentralized finance ecosystem may be viewed as eluding regulatory scrutiny, especially in terms of traditional banking laws and anti-money laundering frameworks.
Uniswap’s decentralized exchange protocol accounts for some of the largest volumes of ERC-20 token transfers in the crypto industry, with a market share of over 21%. It provides a decentralized leverage on traditional financial products like loans, insurance, derivatives, and does so with non-custodial and blockchain-secured applications (dApps).
Uniswap’s V3 (Version 3) was recently launched in May this year and currently leads all exchanges by trading volume, posting over $1.6 billion worth of transactions in just the past 24 hours.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.