Largest DEX receives wells notice from the SEC

[zasad@]

Uniswap will be managed centrally, so sooner or later the authorities will require them to adhere to minimum identity verification and anti-money laundering procedures, which means requesting more data from all users.
I don't know if Uniswap will comply or not but I think some users will have no problem with that.

Uniswap is not a mixer, but simply an exchanger of some tokens for others within the same wallet.

What worries me most is how long Uniswap can continue with the legal procedures. Uniswap Labs' annual revenue is around $20 million. Their revenue is less than PancakeSwap, and I do not think it is enough to go into the details of a long trial if there is serious evidence against them.

https://blockworks.co/news/top-defi-protocols-by-revenue

PancakeSwap and Maker seem to be in a better position.

Before the SEC sends Wells notice to the companies, then the commissioners vote. If the majority wins, the Wells notice is sent to the company. The uniswap company now has 30 days to try to present its case and not bring the matter to trial.
If there is a trial, the case will get a lot of press coverage and other similar companies will help Uniswap as much as possible because it is in their best interest to do so

[bbc.reporter]

@zasad@. I wish there will be a trial. Similar to Ripple's case, the cryptospace needs another precedent to limit uncle Gary's regulation through enforcement tactic. Also, we need another market pump hheheehhe.

However, if the judge rules for the case of the SEC and declares that Uniswap should stop allowing American citizens from using the DEX, what can the government do if a person inside the American jurisdiction uses a VPN and continue trading on Uniswap? How can the SEC stop self custody of their tokens?

[zasad@]

@zasad@. I wish there will be a trial. Similar to Ripple's case, the cryptospace needs another precedent to limit uncle Gary's regulation through enforcement tactic. Also, we need another market pump hheheehhe.

However, if the judge rules for the case of the SEC and declares that Uniswap should stop allowing American citizens from using the DEX, what can the government do if a person inside the American jurisdiction uses a VPN and continue trading on Uniswap? How can the SEC stop self custody of their tokens?

If this case goes to court, my guess is that it will last at least 1 year. And then you have to look at what fines will be imposed on the company. Banning the use of the service by citizens of certain countries and blocking it by IP address do not work. For now I hope that an agreement will be reached between SEC and Uniswap.

[bbc.reporter]

@zasad@. An agreement will only put everything on the cryptospace into a legal grey area. If uncle Gary's decisions are to always attack the cryptospace by regulation through enforcement, it will certainly be much better to go to trial and get a judge's ruling. I predict Hayden will not listen to the SEC and he is ready to go to court with his lawyers. We can be quite certain that he expected this already.



How Ripple can help Uniswap in its clash against the SEC

What lessons should Uniswap take from Ripple’s resilience amidst the SEC’s rising scrutiny?

Source https://ambcrypto.com/bnb-beats-the-market-crash-heres-what-you-should-know/

[zasad@]

@zasad@. An agreement will only put everything on the cryptospace into a legal grey area. If uncle Gary's decisions are to always attack the cryptospace by regulation through enforcement, it will certainly be much better to go to trial and get a judge's ruling. I predict Hayden will not listen to the SEC and he is ready to go to court with his lawyers. We can be quite certain that he expected this already.



How Ripple can help Uniswap in its clash against the SEC

What lessons should Uniswap take from Ripple’s resilience amidst the SEC’s rising scrutiny?

Source https://ambcrypto.com/bnb-beats-the-market-crash-heres-what-you-should-know/

First of all, this trial is very expensive, if you look at the experience of Ripple. As long as there is a standard procedure, it is very difficult to say what will be favorable for Uniswap.

Of course, Uniswap will have the opportunity to assert its rights in court, and most likely the trial will be very long and very costly for the company.

I'm waiting for the standard 30 days to see how this stage ends.

[bbc.reporter]

@zasad@. However, if they do nothing and the SEC begins winning against Uniswap, Coinbase and other decentralized exchanges, similar to our argument before, the SEC can start requiring the cryptospace protocols to register with the government to get a broker license, a license to hold assets similar to a bank and for users they will demand KYC for each wallet used. This will certainly kill the purpose of DeFi.

[zasad@]

@zasad@. However, if they do nothing and the SEC begins winning against Uniswap, Coinbase and other decentralized exchanges, similar to our argument before, the SEC can start requiring the cryptospace protocols to register with the government to get a broker license, a license to hold assets similar to a bank and for users they will demand KYC for each wallet used. This will certainly kill the purpose of DeFi.

Unfortunately, I am not familiar with the whole procedure of working with Wells notice, but I am sure that there is an active work in progress, but we will know the results later.

I remember the history of Uniswap, and this protocol was made by a US engineer who got into programming. The company is registered in the US and this is a problem for them.

I don't think that DeFi will stop developing under the pressure of SEC, it is more likely that the companies will leave the US market.

[bbc.reporter]

Does anyone have news updates on the SEC's wells against Uniswap after what appears to be a uturn of the Biden administration's war on the cryptospace?

It appears that there might be nothing for uncle Gary on this case. Similar to the precedent on Ripple's case, the tokens by themselves that were listed and offered directly on a secondary market in Uniswap are not an investment contracts that will not pass the Howey test.

[zasad@]

Does anyone have news updates on the SEC's wells against Uniswap after what appears to be a uturn of the Biden administration's war on the cryptospace?

It appears that there might be nothing for uncle Gary on this case. Similar to the precedent on Ripple's case, the tokens by themselves that were listed and offered directly on a secondary market in Uniswap are not an investment contracts that will not pass the Howey test.

I think the objection period on the Wells note hasn't passed yet.
https://blog.uniswap.org/the-fight-for-defi-continues
The fight for DeFi continues
"The Uniswap Protocol is a major innovation in markets and benefits consumers
The Uniswap Protocol is autonomous software that enables users to transact directly with one another, securely, without paying fees to centralized intermediaries or relying on them to keep their assets safe. The Protocol can be integrated by anyone with an internet connection and does not rely on any team, or Uniswap Labs, for maintenance. It just works. It has supported $2 trillion in trading volume without a single hack and has been integrated by thousands of teams and copied thousands of times more."

[DooMAD]

The Uniswap Protocol is autonomous software that enables users to transact directly with one another, securely, without paying fees to centralized intermediaries or relying on them to keep their assets safe. The Protocol can be integrated by anyone with an internet connection and does not rely on any team, or Uniswap Labs, for maintenance. It just works. It has supported $2 trillion in trading volume without a single hack and has been integrated by thousands of teams and copied thousands of times more."

The software itself seems robust, but it's definitely their organisational structure that leaves them vulnerable.  Other protocols, like Bitcoin or Monero, for example, are developed in such a way that it's incredibly difficult for regulators to interfere.  If Uniswap Labs wasn't funded the way it is (and registered the way it is), they'd be free to do whatever they wanted.  But because they wanted this to be a profitable venture, they are open to meddling from the authorities.  That's a trade-off you're always going to pay for in the end.

[zasad@]

The Uniswap Protocol is autonomous software that enables users to transact directly with one another, securely, without paying fees to centralized intermediaries or relying on them to keep their assets safe. The Protocol can be integrated by anyone with an internet connection and does not rely on any team, or Uniswap Labs, for maintenance. It just works. It has supported $2 trillion in trading volume without a single hack and has been integrated by thousands of teams and copied thousands of times more."

The software itself seems robust, but it's definitely their organisational structure that leaves them vulnerable.  Other protocols, like Bitcoin or Monero, for example, are developed in such a way that it's incredibly difficult for regulators to interfere.  If Uniswap Labs wasn't funded the way it is (and registered the way it is), they'd be free to do whatever they wanted.  But because they wanted this to be a profitable venture, they are open to meddling from the authorities.  That's a trade-off you're always going to pay for in the end.

When you use products like Unimvap, of course any user has risks that can arise as a result of a smart contract. But that's what auditing and user experience is for.
Governments and organizers cannot change the terms of smart contracts. As long as uniswap works decentralized as before. The protocol has versions with limitations, but they have not been launched yet.

__
But that article should be read in full if interested in the subject. Uniswap openly responds to the SEC's claims. I only quoted the beginning.