The US Securities and Exchange Commission (SEC) has initiated an investigation against Uniswap Labs, the startup that runs the largest decentralized cryptocurrency exchange, Uniswap, according to a report by The Wall Street Journal.
Citing ‘people familiar with the matter’, the news outlet revealed that the investigators of the financial watchdog are seeking information on Uniswap’s marketing and investor services. However, the SEC did not officially confirm or deny the reports.
In a statement to the news outlet, a Uniswap Labs spokesperson said that the firm is “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.”
Uniswap is a decentralized cryptocurrency exchange, meaning it is not controlled by a centralized authority like other crypto exchange giants. Instead, the protocol of the exchange is run by a distributed network. Many are seeing this type of exchange as the future of crypto trading.
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Uniswap is ranked as the largest decentralized crypto exchange with a trading volume of $1.5 billion in the last 24 hours, according to CoinMarketCap. Though Uniswap’s trading volume is far behind what its centralized competitors are reporting, it is gaining popularity as any digital token can be traded using the decentralized protocol.
Is It SEC’s First Move against DeFi?
The alleged investigation came after the SEC Chair, Garry Gensler recently said that the decentralized finance (DeFi) projects could come under the purview of the agency. He specifically pointed out the guns at DeFi projects that offer tokens or other incentives as rewards to participants.
The alleged investigation against Uniswap is still at an initial stage, and it is not confirmed if the SEC will finally press charges or not.
However, the US financial market watchdog has made some high-profile busts in the past, from Telegram’s TON network to Kik’s digital currency. It is now fighting a major battle against Ripple, alleging that the blockchain company illegally raised more than $1.3 billion by selling unregistered security XRP.