Uniswap Responds to SEC’s Wells Notice, Argues Tokens Are Not Securities but ‘File Format’ for Value

Uniswap (UNI) is fighting back against the U.S. Securities and Exchange Commission (SEC).

The largest decentralized exchange by trading volume received a Wells Notice from the SEC last month, which indicates the regulator intends to take enforcement actions against the DEX soon.

Marvin Ammori, the chief legal officer at Uniswap Labs, notes that the project submitted an official response to the SEC on Tuesday.

Ammori argues that the SEC relies on a false assumption that nearly all crypto assets are securities.

“But a token is merely a file format–like a PDF or JPEG. Tokens can represent any value, and overwhelmingly represent commodities (BTC, ETH, stables) & memes & access for useful networks. PDFs are not inherently stock certificates, and tokens are not inherently securities.

Even if securities were involved, the Uniswap protocol (and web app, and wallet) don’t fall under definitions of the ‘securities exchange’ or ‘broker.’

Under law, the Uniswap protocol would have to be specifically designed ‘for’ ‘securities’ – and it is not. It is for general purposes, mainly used for commodities.”

Ammori also says current US law requires securities exchanges to be operated by “groups.” The chief legal officer notes that Uniswap is “autonomous software” and isn’t operated or controlled by anybody.

“Our case is so strong that the SEC is trying to change the law to fight us. The SEC has a pending rulemaking proposing to rewrite its own definition of ‘exchange’ – and to redefine ‘group’ and several other words beyond what they actually mean. Changing what words mean in order to sue us under the new made-up law just isn’t going to work in court.”

The SEC has also accused Coinbase, Binance and Kraken of violating securities laws, launching lawsuits against all three exchanges last year.

Generated Image: Midjourney