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News

Uniswap Labs Challenges SEC’s Claims: Gears Up For Court Battle

May 22, 2024 - Around 2 mins mins to read

Key Points:

  • Uniswap Labs disputes US SEC allegations.
  • UNI and LP tokens are claimed not to be securities.
  • Uniswap is ready to defend its stance in court.
Uniswap Labs challenges SEC’s charges on allegations that its UNI and LP tokens are not securities. The firm is ready to defend itself against the claims in court.
Uniswap Labs Challenges SEC's Claims: Gears Up For Court Battle

Uniswap Labs has reportedly challenged allegations brought against the company by the US Securities and Exchange Commission. The New York-based startup disputes a claim that the company operates as an unregistered exchange and broker-dealer.

Uniswap Labs Challenges SEC’s Allegations

The SEC’s Enforcement Division sent a Wells notice last month, signaling the intention to recommend legal action against Uniswap Labs.

Marvin Ammori, the chief legal officer at Uniswap Labs, told a press conference that the SEC based the case on the incorrect assumption that all tokens are securities.

Ammori clarified that tokens are a file format and not a security per se. The chief legal officer also warned the commission that legal action risks an adverse decision and possibly clipping the commission’s wings as far as the authority to regulate crypto tokens is concerned.

Readmore: SEC Leans Toward Spot Ethereum ETF Approval: Report

Tokens are Not Securities, Says Uniswap’s Chief Legal Officer

Uniswap Labs argues that the UNI tokens the governance token for Uniswap are not securities under the Howey Test, the legal guideline defining investment contracts.

The company also states that LP tokens special tokens awarded to users contributing to liquidity pools on Uniswap are not securities but accounting tools that keep track of a user’s assets and any fees they might earn.

Ammori said that Uniswap Labs was ready to defend the company’s position in court: “We will litigate if we have to, and if we litigate, we will win.”

All these happen while SEC Chairman Gary Gensler continues to insist that the regulator has the authority over digital assets, mostly unregistered securities, according to his claims, which are under the rule of the SEC.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Author

Thana

I am a news editor at Coincu, where I produce daily editorial packages and manage the knowledge and review article sections. Before journalism, I earned a Bachelor's degree in Global Logistics and Supply Chain Management from Northampton University and studied news journalism at Press Association Training.