Uniswap Labs urges SEC to reconsider proposed changes to DeFi rules

Uniswap Labs, a decentralized finance (DeFi) platform, has formally asked the US Securities and Exchange Commission (SEC) to reconsider its proposed amendments to the Securities Exchange Act of 1934, which seek to broaden the definition of an “exchange,

The company argues that these changes could go beyond the SEC’s authority over DeFi platforms and could face legal challenges following a recent Supreme Court decision.

The request comes after the Supreme Court ruling in Loper Bright Enterprises v. Raimondo, which Uniswap Labs says has changed the legal landscape. This ruling overturned Chevron Deference, a long-standing practice that gives state agencies wide latitude to interpret unclear laws

Coinbase Chief Legal Officer Katherine Minarik explained Uniswap lab’s key argument that without Chevron Deference, the SEC’s interpretation lacks a solid legal foundation. Uniswap Labs argues that the current law does not cover DeFi platforms and that the court is likely to reject the SEC’s proposed changes

This challenge comes after the SEC issued a Wells Notice to Uniswap Labs in April, indicating potential legal action against the company for allegedly trading securities without proper registration. Uniswap Labs defends itself by saying its platform is just a passive technology, not an exchange as the SEC defines it.

In the midst of these changes to the law, Uniswap Labs is calling on the SEC to reopen discussions on the proposed changes. The company argues that the previous rollbacks were made under outdated legal rules, so new public input is needed to ensure that any new rules fit with the current legal framework.

Uniswap Labs also worries that the proposed change could affect innovation in the DeFi industry, which handles trillions of dollars in transactions. They point to previous court cases where judges were reluctant to apply securities laws to decentralized crypto services.

Despite challenges, Uniswap Labs remains committed to compliance, prepared to challenge SEC actions that it believes are politically motivated, and possibly seek legal recourse to the Supreme Court.

Also Read: Coinbase Challenges SEC on Gensler Communication Discovery

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