The US Securities and Exchange Commission (SEC) is reportedly investigating Uniswap Labs, the company behind the popular Decentralized Exchange (DEX) protocol Uniswap. As per a report in the Wall Street Journal, people familiar with the matter revealed that the SEC is looking into user history and how the platform is being used by investors.
The investigation is currently in the very early stage, this doesn’t necessarily end up in serious allegations of wrongdoings. However, the reported investigation comes just days after SEC signed a deal with a blockchain analytic firm to help them investigate the diverse Defi ecosystem. SEC chief Gary Gensler has reinstated the need to regulate the Defi market in his past interviews.
Uniswap is the leading DEX protocol accounting for over a billion dollars in daily trading volume, and SEC’s interest in the largest Dex platform indicates the growing scrutiny towards the Defi market. Gensler had said that no matter how decentralized these Defi platforms claim to be since they offer valuable tokens as rewards they might fall under the overwatch of the SEC.
SEC Set Eyes on Defi Market What’s Next?
The Biden administration is adamant about bringing the crypto market under the regulatory watch, this was evident from the highly controversial late-minute amendment to the crypto taxation section in the Infrastructure bill and continuous comments made by the SEC chief. A Uniswap spokesperson told TheBlock that they will fully comply with the regulatory authorities. They said,
“We are committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.”
The probe might be in the preliminary stages but it makes it very clear that the SEC would go after the Defi market which is considered highly decentralized and anonymous, something the SEC has the main issue with.
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