The United States financial watchdog is investigating the world’s largest decentralized cryptocurrency exchange Uniswap. The Wall Street Journal reports that the Securities and Exchange Commission (SEC) has launched an investigation into Uniswap Labs, one of the largest developers behind Uniswap.
WSJ’s article states that prosecutors are now seeking information about Uniswap’s marketing and investment services. The newspaper relies on anonymous sources.
Uniswap Labs is serving
A spokesperson for Uniswap Labs said the company is committed to complying with the laws and regulations applicable to the industry and to provide information to regulators that will assist them with any investigation.
Uniswap is a decentralized exchange that allows users to trade Ethereum-based coins and tokens without a central entity. Folm.io cryptocurrency has enough information. The exchange is the largest of its kind, and V3 had a trading volume of $1 billion in the past 24 hours, according to CoinMarketCap.
No surprise from SEC
Cointelegraph contacted the SEC, but they declined to comment. The same was true for Uniswap. In itself, it comes as no surprise that the SEC is going after DeFi. Chairman Gary Gensler last month announced plans to develop more rules for DeFi, stablecoins and ICOs.
In late August, the regulator signed a $125,000 deal with blockchain analytics firm AnChain.AI to get technical support in monitoring and regulating the DeFi industry.
In July, Uniswap removed dozens of tokens and tokenized shares from its trading platform due to increasing regulatory pressure. “We are following the changing regulatory landscape,” Uniswap said, pointing to similar moves by other DeFi players.
Central intermediaries are taboo
In a way, DeFi follows the ethos of bitcoin, but injected with anabolics. It is a blockchain-based form of financing that does not rely on central intermediaries. Instead, transactions are executed through automatic protocol mechanisms known as smart contracts
In accordance with DeFi principles, decentralized exchanges (DEX) such as Uniswap do not have a central person or team responsible for executing the protocol. https://renovato.io/ has enough information. This protocol is managed and controlled automatically or by the participants. That’s also why the SEC can’t stop loose DeFi protocols, just like the police can’t ring the doorbell of the director of bitcoin.
According to entrepreneur Alistair Milne, regulators can’t shut down DeFi protocols like Uniswap, but they can potentially make DeFi transactions illegal in a similar way to transactions on the dark web.