jakiro
Source: Web3 Law
On April 10, 2024, UNISWAP Labs received Wells Notice from the US Securities and Exchange Commission (SEC) law enforcement department, informing the SEC to take regulatory law enforcement operations such as UNISWAP LABS.
Uniswap Labs is the sponsor of the decentralized trading protocol Uniswap Protocol. Since its launch five and a half years ago, its transaction volume has exceeded US $ 2 trillion., DEFI market leader.
This behavior of SEC is regarded as a blatant provocation on the decentralized DEFI project, and it will have a huge impact on the Crypto market.Although we saw the strong response of $ Uni, we saw more market unity.
This article will combine UNISWAP Labs’s SEC response article and its relative compliance governance structure. Looking at why SEC has mentioned an impossible lawsuit?
1. What is Wells Notice
First of all, clear,Wells Notice is not a formal prosecution or regulatory law enforcement document, but a formal warning or inform,It is an early warning of the SEC’s upcoming law enforcement operations.
Secondly,Wells Notice does not explain the specific reason to take supervision and law enforcement, which makes the Uniswap Labs passive and must be comprehensively confirmed to be innocent.
Wells Notice startup process: 1. After investigating the suspicious company within the internal SEC (whether it violates the securities law), it is recommended to take action on the suspicious company; 2. The suspicious company will get a 30 -day window period after receiving Wells Notice to refute the 30 -day window period to refuteThe allegations and proofs prove their innocent arguments; 3. SEC’s subsequent evaluation is evaluated to decide whether to take regulatory law enforcement.
One of the most well -known cases recently includes SEC VS.Ripple cases.
Ripple received SEC’s Wells Notice in December 2020, which immediately caused it to remove from CoinBase.Although Ripple successfully argued that it was not told that XRP would be regarded as a securities, the three -year legal procedure proved that the company’s reputation paid a high price.
2. How does Uniswap Labs confirm myself and innocence
(Blog.uniswap.org/fighting-For-defi)
Let’s look at Uniswap Labs releasedFighting for defiArticle:
From the perspective of SEC’s regulatory and enforcement of the market’s most compliant market, the most law -abiding market participants (Coinbase, Uniswap), and for 6 years, they are unwilling to provide clear supervision paths.This action is more of a political demand(Combined with the recent Congress legislators for DEFI).
The UNISWAP Labs Base American company created Uniswap Protocol, bringing unprecedented innovation to the market.These innovations based on open source code allows users to directly participate in market transactions without any intermediate business under the premise of self -custody property.Uniswap Labs believes that its products are not only legal, but also changeable.They have established a transparent and verifiable market through fewer gokee, so as to give the public around the world to achieve cheap and conveniently participating in the global economy.
If the SEC continues to protect the traditional financial opaque system, and attack can create opportunities for Americans and reduce cost innovation, open and transparent technology, then Uniswap Labs has to fight against US government agencies to protect innovation and economic freedom.
No matter what the SEC decides, the law has clearly stipulated in the following points:
1.SEC regulatory law enforcement without Congress authorized -SEC only has jurisdiction over “securities”
President SEC had previously made it clear to Congress that whether encrypted assets can be determined that “securities” require Congress legislation to confirm.
And in Risley vs. Uniswap Labs case, the judge said that the transaction on the Uniswap was not suitable for securities law (neutral does not require licenses), and it is clearly emphasized: “The determination of securities is best to be resolved by Congress.”
In addition, in the SEC VS. Ripple case, judges clearly clearly do not constitute an investment contract for the secondary market transactions of crypto assets.
It can be seen that the secondary market transaction above Uniswap does not have a problem of “securities”.
2. Do not comply with the definition of stock exchanges or agents
Even if most cryptocurrencies are identified as “securities”, the Uniswap protocol, applications and wallets still do not meet the legal definition of the stock exchange or Securities Exchange or Broker.
This is clearly performed in the recent SEC VS. Coinbase’s ruling. In the initial stage of the case, the court has rejected SEC’s claim that the non -hosting encryption wallet is the agent, even if they charge.
3. There is no “securities” issuance
$ Uni tokens are not securities because it does not meet the legal definition of any type of securities, including the definition of “investment contracts”.According to the US Securities Law and Haowei Test, the investment contract is a money investment for ordinary enterprises. It is expected to obtain profits and depends entirely on the efforts of others.There is no contract or commitment between the UNISWAP Labs and the token of more than 300,000 holders, nor a common cause, and the value of the tokens does not depend on the efforts of Uniswap Labs.
Although SEC recently investigated the Ethereum Foundation, CFTC has clearly stated that Bitcoin and Ethereum are not securities.The UNISWAP technology ecosystem is enough to be decentralized, just like Bitcoin and Ethereum.
Third, Uniswap’s compliance governance agency
Earlier, we sorted out the compliance path after the Uniswap Labs divestitudation agreement, which fits the legal defense of UNISWAP in the article.Under such architecture, the SEC is really a small chance.
This path also provides a supervisory friendly sample for Web3 decentralized projects.On the one hand, the purpose of peeling is to achieve gradual decentralization on the one hand, and on the other hand, it is also to obtain more room for rotation at the level of regulatory compliance.
Decentralization + non -securities bonus: The Uniswap protocol chain runs independently, and is governed by the Uniswap Dao to achieve decentralization. A single function token UNI govern the tokens.This model avoids SEC’s securities identification and brings the court’s victory referee;
DAO Legal Packaging + Member Co., Ltd.: Uniswap Dao set up a legal entity of Uniswap Foundation. As a legal packaging of DAO, on the one hand, it guarantees the limited liability of DAO members.
Labs independent operation + flexible front -end development: The UNISWAP LABS team developed and maintained the agreement as a separate legal entity, converted into the main contributor to the agreement, on the one hand, get rid of the restrictions from the agreement, and on the one hand, it can build and maintain front -end products by calling the back -end protocol to achieve sustainable sustainability., So as to open the UNISWAP DAPP of the charging mode.
Regulatory application rather than protocol: Just as the supervision principles advocated by the A16 Z, the agreement on the decentralization chain is difficult to compatible with supervision, and the front -end application can fully meet the requirements of the supervision, so that the team and the product itself can get rid of the regulatory risks that may be facing.Like any app, the front -end application can include KYC/AML/CTF verification according to regulatory requirements, and then remove the tokens of the supervisory warning at any time, apply for license quality, etc.
If the SEC is regulated and enforced under such a compliance path, except for the SEC “head iron” in order to complete political tasks, it may be some other things.
The most likely is UNISWAP’s automatic market business mechanism (AMM).The specific mechanism is temporarily not investigated, but the AMM mechanism is run by decentralized Uniswap Protocol, not Uniswap Labs.If the SEC challenge the Uniswap Protocol protocol, it is equivalent to challenging the freedom of the code based on the freedom of speech, which is equivalent to the SEC to open up a brand that is more impossible to win.
Four,Impact on the market
Whether it is the defense in the UNISWAP Labs article or the recent cases of encrypted supervision, SEC’s attack on Uniswap Labs is relatively weak, and there is basically no probability of winning.Despite short -term $ UNI pressure.
We recognize that this is a act of political appeal.
This behavior of the SEC will only make people in the crypto world more united, just as the founder of Uniswap Labs said:
“I am engaged in cryptocurrency work because I believe that it can eliminate the opportunities to obtain value and ownership by eliminating the gatekeeper (middlemen), just like the way of seamlessly obtaining information on the Internet, which has a huge positive impact on the world.
I am extremely proud of the various versions of Uniswap, thousands of projects built on it, network applications with millions of users, wallets with hundreds of thousands of downloads, and changing tens of millions of people around the world.We are still in the early stages -this technology and revolution will play a role in decades.
I hope we can unite as a industry.The more united, the more difficult it is, the more difficult it is to be killed.So let us be friends.“
