Uniswap Labs, the innovator behind Ethereum’s leading decentralized trading platform, has refuted claims from the U.S. Securities and Exchange Commission (SEC), arguing that cryptocurrency tokens do not qualify as securities but are similar to file formats such as PDF.
The New York-based startup rejected claims that it operates an unregistered exchange and broker-dealer, according to a notice sent to Wells by the SEC Enforcement Directorate last month, signaling potential legal action.
Marvin Ammori, Chief Legal Officer of Uniswap Labs, emphasized in a Zoom press conference: “Tokens are simply a file format for value and are not inherently securities. The SEC must unilaterally redefine exchange, broker-dealer and investment agreements to encompass our operations.”
In a detailed 40-page response to the SEC, Uniswap Labs argued that taking legal action against them risks the SEC’s authority over cryptocurrency tokens. The company said it was prepared for the lawsuit and was confident it would win.
SEC Chairman Gary Gensler’s position that decentralized exchanges are subject to regulatory oversight has been challenged by Uniswap Labs, which argues that the UNI token, which serves as Uniswap’s governance token, does not meet the Howey test requirements for investment contracts.
Uniswap Labs also refuted the classification of LP tokens as securities, clarifying that these tokens are not intended for investment purposes but rather function as an accounting tool to monitor user-provided assets and returns.
Uniswap Labs’ response highlights the ongoing debate surrounding the regulatory status of digital assets and decentralized exchanges and highlights the evolving landscape of cryptocurrency regulation.
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