Decentralization Uniswap is being investigated by the Securities and Exchange Commission (SEC).

According to unidentified people acquainted with the case, the US Securities and Exchange Commission (SEC) is looking into the no-order-book decentralized exchange Uniswap.

According to the Wall Street Journal, the SEC is investigating Uniswap Labs, the company that created the platform, for information on how it is used and marketed. The probe is still in its early stages and may not result in any official claims of misconduct.

According to a Uniswap spokeswoman, the company is "dedicated to complying with the laws and regulations regulating our sector, as well as providing information to regulators that will assist them with any inquiry." The Securities and Exchange Commission (SEC) has declined to comment.

This is the first known probe of defi with the SEC, and it comes just weeks after the new head, Gary Gensler, began office.

Despite the fact that there is no high court judgement or legislative act that provides the SEC clear jurisdiction, Gensler is prioritizing his extremely limited budget for defi, despite the fact that the former Goldman Sachs banker is too busy with many other essential reforms at the SEC.

That's especially true when it comes to something like Uniswap, which has been forked before, demonstrating the platform's decentralization.

As a result, establishing responsibility in this case, given that Uniswap is similar to Wikipedia in that anyone may add new assets and liquidity, should be a challenging task that courts will protect under the first amendment because code is speech.

Uniswap Labs could also buy an SEC-registered corporation, as Coinbase did, and be compliant, but they still won't be totally compliant because anyone can add any asset.

The only way they can comply is to effectively become a centralized exchange in terms of their own front interface, which would very certainly result in more forking of the platform and a drop in liquidity.

As a result, it's possible that Gensler prefers to bully behind closed doors rather than take formal action, given that his agency has no limits on insider trading in cryptos, unlike stocks, over which they have appropriate control.

Share: