Coinspeaker Uniswap Cites Chevron Case Requesting SEC to Drop Bid on Ruling Over DeFi
Uniswap Labs, the developer of decentralized exchange Uniswap, has recently asked the US Securities and Exchange Commission (SEC) to drop its proposal of ruling over the decentralized finance (DeFi) market.
Last year in April 2023, the securities regulator proposed to expand the definition of what would qualify as an exchange as per the Exchange Act of 1934. Back then, the SEC argued that the definition should also include crypto market participants within the DeFi sector.
Uniswap has been opposing the SEC’s demand while arguing against it. In a letter on Tuesday, July 9, Unsiwap added more arguments to its comment letter sent to the SEC last month, thereby calling the SEC to drop its proposed amendments.
In its recent arguments, Uniswap cited the Supreme Court decision on Chevron stating that courts would no longer be required to differ from federal agencies and interpret the ambiguous laws.
Uniswap stated that the US SEC would be wasting “limited resources” by working on amending the definition of “exchange”, a move that was already “likely to draw, and unlikely to survive, a judicial challenge” even before the Chevron decision.
“If the Commission moves forward with its proposed amendments, a reviewing court […] is certain to conclude that the Commission’s interpretation of the Exchange Act stretches the statutory text too far,” stated Uniswap.
Additionally, the decentralized exchange stated that the SEC’s proposed amendments have a broad scope with “no discernible limits” for the public. This would require the SEC to continue the litigation on a case-by-case basis while resulting in inconsistencies and lack of clear guidance.
Uniswap: SEC Shouldn’t Adopt Proposed Amendments
In its blog post, Uniswap noted that the SEC “shouldn’t adopt the proposed amendments”. “The Commission drafted the proposed amendments against a legal backdrop that no longer exists,” it added.
Today @Uniswap Labs urged the SEC not to proceed with its proposed rulemaking that would dramatically and improperly expand the definition of an ‘exchange’ to include DeFi and more. 1/x
— Katherine Minarik (@MinarikLaw) July 9, 2024
Uniswap stated that if the SEC does not adopt the amendments, it should at least reopen the comment period for its proposal to allow the public to consider the recent Chevron decision.
In April, the SEC issued a Wells notice to Uniswap, formally notifying the decentralized exchange of the SEC staff’s intention to recommend enforcement action against them. In a blog post a month later, Uniswap criticized the SEC’s legal arguments as “weak” and expressed its readiness to “fight” the matter in court if necessary.
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Uniswap Cites Chevron Case Requesting SEC to Drop Bid on Ruling Over DeFi