SEC Investigating Uniswap Labs: Report

The U.S. Securities and Exchange Commission (SEC) is investigating the developer of decentralized exchange Uniswap, the Wall Street Journal reported Friday.

• The SEC is seeking information about how investors use the exchange and how it is marketed, the report said, citing people familiar with the matter.
• The exchange’s developer, Uniswap Labs, has said that it will assist the regulator with its civil inquiry. The SEC has declined to comment, according to the Wall Street Journal.
• Uniswap is the Ethereum blockchain’s largest decentralized exchange by trading volume.
• While it is still unclear exactly what the SEC wants to know, the news is a sign of the regulator’s intent to wield greater oversight of decentralized finance (DeFi), something SEC Chairman Gary Gensler hinted at in recent comments.
• No wrongdoing appears to have been alleged at this time.
• Gensler has argued that while there may be no central entity in charge of a decentralized exchange, DeFi projects that offer incentives or digital tokens to participants could fall under the purview of SEC regulation.
• “There’s still a core group of folks that are not only writing the software, like the open-source software, but they often have governance and fees,” he said in an interview with the Wall Street Journal last month.
• The SEC filed what it called its first case involving securities using DeFi technology last month, charging so-called DeFi lender Blockchain Credit Partners with raising $30 million through allegedly fraudulent offerings.

Read more: Uniswap Labs Limits Access to Some Tokens

UPDATE (Sept. 3, 14:45 UTC): Adds Gensler comments on decentralized finance, case against Blockchain Credit Partners; additional details.