The U.S. Securities and Exchange Commission (SEC) is reportedly investigating Uniswap Labs, the startup behind the world’s largest decentralized exchange (DEX).
Uniswap Labs is the team responsible for Uniswap, a DEX, which is different than Coinbase or Binance in the sense that it doesn’t require an intermediary to complete trades. Instead, transfers can be made through the blockchain, without the intervention of a third party. Notably, Uniswap and other DEXes generally don’t collect personal information on users. That’s because DEXes don’t allow people to deposit FIAT currency; only crypto.
The SEC wants to know more about Uniswap operations. The Wall Street Journal reported, citing “people familiar with the matter,” that the enforcement attorneys are said to be seeking information about how investors use Uniswap and how it is marketed.
A spokesperson for Uniswap said that the company is “committed to complying with the laws and regulations governing our industry and providing information to regulators that will assist them with any inquiry,” as per the report.
Uniswap proactively restricted access to some tokens after U.S. regulators announced that they would scrutinize decentralized finance (DeFi) products. Uniswap’s decision was controversial among crypto users.
The $UNI token reacted negatively to the news. It dropped over 6% on the news and may fall further, according to CoinMarketCap.