SEC Drops Investigation Into Uniswap, Will Not File Enforcement Action

The U.S. Securities and Exchange Commission (SEC) has dropped its investigation into Uniswap Labs, the Brooklyn-based company behind the decentralized protocol of the same name, according to a Tuesday announcement from Uniswap.

Uniswap received a Wells notice — essentially, a heads-up from the regulator informing respondents of the charges the SEC is planning to bring against them — last April, accusing the decentralized exchange of operating as an unregistered securities broker and unregistered securities exchange, and of issuing an unregistered security. In subsequent blog posts and social media posts, the company and its executives defended the legality of Uniswap’s operations and pledged to fight the pending charges.

The company celebrated the SEC’s decision to drop the charges, calling it a “huge win for DeFi” in a social media post.

“We appreciate that the SEC’s new leadership is taking a close look at the pending enforcement investigations and litigations across our industry, not just our own, and has recognized that there is a more effective path to protecting American consumers. The conclusion of our investigation is not only welcome — and just — relief for Uniswap Labs, but also for the broader DeFi community of builders, users, and developers working toward a better financial system for all of us,” the company said in a Tuesday blog post.

Amanda Tuminelli, chief legal officer at the DeFi Education Fund, said in a statement to CoinDesk that the SEC’s decision to drop the investigation into Uniswap Labs “gives DeFi companies additional comfort to pivot from defending to embracing our right to build decentralized tech.”

The SEC’s decision to close its investigation into Uniswap Labs is the latest in a wave of similarly-dropped investigations into crypto companies, including Robinhood Crypto and non-fungible token marketplace OpenSea. The SEC has also agreed to drop its case against Coinbase, pending approval from the agency’s commissioners, according to the crypto exchange.

The SEC is currently overhauling its approach to crypto regulation. Former Chairman Gary Gensler, known for his so-called “regulation-by-enforcement” approach to the crypto industry, stepped down in January. His replacement, Acting Chairman Mark Uyeda, has made drastic changes at the agency – including standing up a new Crypto Task Force under the leadership of crypto-friendly Commissioner Hester Peirce and disbanding the Crypto enforcement unit – signaling a new day for crypto companies in the U.S.

A representative for the SEC declined to comment.