Uniswap cites Supreme Court to challenge SEC’s DeFi “exchange” definition

Uniswap strongly urged the United States Securities and Exchange Commission (SECOND) to abandon its attempt to include decentralized finance (DeFi) markets in its definition of an “exchange.”

In a letter On July 9, Uniswap cited a recent Supreme Court decision on the Chevron Doctrinesaying the regulator could no longer use “Chevron deference” to exert power over the crypto industry.

The 40-year-old Supreme Court doctrine allowed administrative agencies like the SEC to interpret laws that Congress had left ambiguous. On June 28, the Supreme Court issued a landmark decision striking down the Chevron Doctrine.

“For better or worse, the Commission will not be able to claim the benefit of Chevron’s deference in defending its aggressive and atextual interpretation of its statutory authority,” Uniswap said.

“There is no reason to waste the Commission’s limited resources on this issue, nor to force industry to do the same.”

Uniswap is a decentralized cryptocurrency exchange (DEX) that runs on the Ethereum blockchain. It allows users to trade various Ethereum-based tokens directly with each other without the need for an intermediary. Uniswap uses an automated market-making (AMM) system, which involves liquidity pools rather than traditional order books, allowing for continuous trading and liquidity provision.

Uniswap had already criticized the SEC’s attempt to broaden its definition of an exchange in June, but now, without the Chevron Doctrine, the SEC’s proposal requires a much stricter interpretation of the law to gain authority over cryptocurrency markets.

“If the Commission goes ahead with its proposed amendments, a supervisory tribunal “will exercise[ing] independent judgment to determine the meaning of [the Exchange Act’s] “The Exchange Act provisions” will likely conclude that the Commission’s interpretation of the Exchange Act stretches the statutory text too much,” Uniswap argued.

Katherine Minarik, Uniswap’s chief legal officer, highlighted on X the Supreme Court’s rejection of deference to Chevron. “For better or worse, the Supreme Court rejected deference to Chevron. The SEC’s proposal was flawed even with that deference — and even more so by today’s standards,” she said.

In April, Uniswap received a Wells Notice from the SEC. Uniswap responded by stating that the SEC’s legal arguments were “weak” and had been “refuted” by the courts.

“The SEC’s aggressive theories are an effort to expand its jurisdiction beyond exchanges to communications technologies – and beyond securities to all markets,” Uniswap said.

Uniswap Responds to SEC Wells Notice, Asks SEC to Drop “Weak” Charges

Uniswap Labs Denounces SEC as ‘Repeat Anti-Crypto Offender’

A Wells Notice, which is typically sent before a formal legal action is initiated. Coinbase and issuer of BUSD Paxos are among the growing list of crypto companies that have received such notifications.

Uniswap Labs received a Wells Notice from the SEC in April warning that the DEX creator may be violating U.S. securities laws by operating an unregistered broker-dealer through its app interface.

Uniswap has issued a 40-page response a month later, saying the SEC was expanding the definitions of securities, exchanges and contracts.

Fuente