Uniswap Labs, creator of the decentralized exchange Uniswap, is allegedly under investigation by the SEC. Regulators are making an effort to catch up to DeFi, since SEC Chair Gary Gensler considers it the “Wild West.” The inquiry into Uniswap Labs may signify a shift towards heightened regulatory enforcement in the field of cryptocurrencies.
The US regulatory agency is said to be scrutinizing the company behind the world’s largest decentralized crypto exchange (DEX).
The SEC’s Inquiry into Uniswap
According to the Wall Street Journal, the SEC has launched a civil inquiry against Uniswap Labs. A number of individuals acquainted with the situation, according to the WSJ, have revealed that enforcement lawyers are trying to get information on how Uniswap is used and how the company’s staff promotes the platform.
Uniswap Labs, according to the Journal, is dedicated to following the rules and regulations in the sector and sharing information with authorities in order to help them with any inquiries.
A new age of SEC enforcement is on the horizon, based on recent SEC speeches on decentralized finance (DeFi).
The inquiry may not result in any official accusations of misconduct, but it is happening just after the SEC’s chairman, Gary Gensler, discussed the rise of DeFi.
Gesler has already warned that DeFi initiatives may run afoul of both U.S. securities and commodities laws as well as banking regulations.
Uniswap’s Recent Developments
The month of August alone has seen $1 billion in user fees produced by Uniswap. This means that this DeFi protocol is the first to do so. Decentralized banking and the crypto world are growing full with systems like Uniswap, which provide very rapid currency exchange.
In 2020, Uniswap released its own digital asset called UNI, which is unique in that it allows its holders to participate in decision-making. A vote on fees and protocol governance is also possible. The current total market capitalization of all UNI tokens is $30 billion.
The programming that enables these activities runs on the internet as a ‘protocol.’ These procedures function without the need for a server executing the software. In addition, they have a network of interconnected computers that talk to each other.
Many of these software developers claim that they have little say in how these protocols operate once started. The statement is very valuable if its veracity can be confirmed since it could help them minimize their exposure to liability.
How do you feel about Uniswap’s recent troubles?