DeFi
Uniswap Says SEC Should Drop Proposed DeFi Rules, Citing Chevron Decision
Decentralized Exchange (DEX) Uniswap urged the U.S. Securities and Exchange Commission (SEC) to drop its proposal to regulate decentralized finance (Challenge) space, citing the recent decision of the United States Supreme Court decision on Chevron’s deference.
In a letter In a filing with the SEC on Wednesday, Uniswap’s lawyers argued that, “for better or worse, the Commission will not be entitled to Chevron’s deference in defending its aggressive and atextual interpretation of its statutory authority.”
The second propose to expand the definition of an exchange in April last year, integrating DeFi protocols such as DEX under its jurisdiction. In a press release accompanying the announcement, SEC Chairman Gary Gensler said, “Make no mistake: many cryptocurrency trading platforms already fall within the current definition of an exchange and therefore have a duty to comply with securities laws.”
In its letter Wednesday, Uniswap argued that the SEC’s proposal relied on an “incredibly broad and unprecedented” reading of the Securities Exchange Act of 1934, and that the regulator was exceeding its statutory authority.
What is Chevron Deference?
Last month, the Supreme Court governed to abolish “Chevron deference,” a long-standing doctrine that gave administrative agencies under the president the authority to interpret certain laws left vague by Congress.
Uniswap’s lawyers cited the Supreme Court’s decision in their letter to the SEC, saying that “there is now no realistic prospect that a court could uphold the proposed amendments if challenged,” and that the legal context in which the SEC drafted its proposed amendment has been “replaced with something far less forgiving of agencies’ efforts to stretch the meaning of the laws they enforce.”
The cryptocurrency industry was quick to celebrate the Supreme Court’s decision last month, with the Crypto Council of Innovation noting that it called into question the “role and firepower” of regulators such as the SEC.
Uniswap vs. SEC
There is no love lost between Uniswap and the SEC, with the DEX itself facing enforcement action from the regulator.
In April, Uniswap revealed that she had received a notice from Wells from the SEC, that the company’s general counsel, Marvin Ammori called an “abuse of power” on the part of the regulator.
The following month, the exchange pushed back against the SEC in a blog postcalling its legal arguments “weak” and “an attempt to extend its jurisdiction beyond trade to communications technologies.”
Edited by Stacy Elliott.