The SEC’s Suit Against Uniswap Is an Opening Attack Against DeFi

The DEX received a Wells Notice from the regulator, suggesting an enforcement action is imminent. While we don’t know the nature of the potential charges, the news raises the threat of legal jeopardy for decentralized finance.

AccessTimeIconApr 11, 2024 at 6:59 p.m. UTC
Updated Apr 12, 2024 at 8:04 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Uniswap Labs, the Brooklyn-based outfit primarily responsible for developing the protocol of the same name, reportedly received a Wells Notice indicating the U.S. Securities and Exchange Commission intends to sue. While the decentralized finance (DeFi) behemoth said it is “ready to fight” the SEC, indicating a willingness to go to court, the move does represent the latest front in the SEC’s yearslong battle with the crypto industry.

This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.

And to some extent, it is entirely predictable. Before this, the SEC has filed suit against U.S.-based exchanges Coinbase and Kraken. In fact, the reason the industry is so familiar with the term “Wells Notice” is because Coinbase received one in the months before the SEC’s lawsuit dropped. But the move is also a serious escalation in the SEC’s anti-crypto legal barrage.

“Taking into account the SEC’s ongoing lawsuits against Coinbase and others as well as their complete unwillingness to provide clarity or a path to registration to those operating lawfully within the US, we can only conclude that this is the latest political effort to target even the best actors building technology on blockchains,” Uniswap said on a blog announcing the Wells Notice.

The SEC’s biggest crypto cases so far have been after centralized institutions — the aforementioned centralized exchanges Coinbase and Kraken and the company behind the XRP cryptocurrency, Ripple. Suing the organization behind a decentralized protocol like Uniswap is uncharted territory.

Perhaps the closest example on the books would be the SEC’s case against LBRY, which built a decentralized alternative to YouTube that was forced to shut down after a lengthy appeals process with the U.S. securities watchdog. The SEC alleges LBRY sold unregistered securities via a utility token launch, and initially sought $22 million in fines but lowered that to $111,000 after acknowledging the company’s financial struggles.

The ongoing, international cases against the developers of Tornado Cash might also be instructive, considering those cases in the U.S. and the Netherlands have become symbols of whether or not individuals are responsible for how their self-executing code is used after releasing it to the public.

“The SEC is very imaginative in the ways that you can be violating their rules,” Bill Hughes, senior counsel and director of global regulatory matters at Consensys, told CoinDesk. Part of the issue, conceivably, is that Uniswap Labs runs the biggest portal onto the Uniswap protocol via Another potential concern is the UNI governance token, launched to give users some control over protocol governance but could be twisted to look like a securities offering.

That said, Hughes doesn't think the SEC will pursue cases against Uniswap token holders or users. "If you are one of those and a little freaked out, take a breath and calm down," he said on X. "If they were also going to sue YOU, then you'd be getting an email from the SEC asking to talk to you on the phone. You aren't going to be getting one of those so relax."

Whatever the case, Hughes suggested this is likely just the biggest shot the SEC will take against the DeFi industry. The SEC’s move “has been to sue somebody in some category and one or two others before moving on to another category … like suing Coinbase and then Kraken. We'll see if they sue other DEXes.”

CORRECTION (April 11, 2024, 19:44 UTC): Fixes the spelling of Uniswap's name in the headline.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Daniel Kuhn

Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.