Uniswap Labs, a decentralized finance (DeFi) platform, has formally requested the U.S. Securities and Exchange Commission (SEC) to reconsider its proposed amendments to the Securities Exchange Act of 1934, aimed to broaden the definition of an “exchange,
The company argues that these changes might go beyond the SEC’s authority over DeFi platforms and could face legal challenges following a recent Supreme Court decision.
The request comes after the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, which Uniswap Labs says has changed the legal landscape. This ruling overturned Chevron Deference, a long-standing practice that gives government agencies a lot of freedom in interpreting unclear laws
Coinbase Chief Legal Officer Katherine Minarik, explained Uniswap lab’s key argument that without Chevron Deference, the SEC’s interpretation lacks a solid legal foundation. Uniswap Labs argues that the current law doesn’t cover DeFi platforms and that the court is likely to reject the SEC’s proposed amendments
This challenge comes after the SEC issued a Wells Notice to Uniswap Labs in April, indicating potential legal action against the company for allegedly trading securities without proper registration. Uniswap Labs defends itself by saying its platform is just a passive technology, not an exchange as the SEC defines it.
Amid these legal changes, Uniswap Labs calls for the SEC to reopen discussions on the proposed amendments. The company argues that the earlier feedbacks were made under outdated legal rules, so new public input is needed to make sure any new regulations fit with current legal frameworks.
Uniswap Labs also worries that the proposed amendment could impact innovation in the DeFi industry, which handles trillions of dollars in transactions. They point to previous court cases where judges were reluctant to apply securities laws to decentralized crypto services.
Despite challenges, Uniswap Labs remains committed to compliance, prepared to challenge SEC actions politically motivated in their view, potentially pursuing legal recourse up to the Supreme Court.
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