Uniswap Labs Leverages Supreme Court Ruling to Fight SEC's Crypto Market Control

Uniswap Labs, the developer of the world's largest decentralised exchange (DEX), is already leveraging this decision.

Uniswap Labs, the company behind the largest decentralised crypto exchange in the world, has fired back at the US Securities and Exchange Commission (SEC) over its recent legal pursuits.

The back-and-forth began earlier this year when the SEC proposed expanding the legal definition of “exchange” to include decentralised finance (DeFi) protocols.

This move would have significant implications for Uniswap, which operates a decentralised exchange that allows users to trade cryptocurrencies without the need for a middleman.

In response to the SEC's proposal, Uniswap Labs filed a strongly worded letter on June 13, arguing that the proposed definition is “staggeringly broad and unprecedented.”

The letter also stated that the SEC's proposal “would not withstand judicial scrutiny if it were ever actually applied to DeFi protocols in the real world.”

Following the Supreme Court's decision in the Loper Bright case on June 28, which limited the ability of federal agencies to interpret the laws they enforce, Uniswap Labs is now doubling down on its criticism of the SEC.

In a new letter to the SEC on Wednesday, Uniswap Labs' representative lawyers are arguing that the SEC agency can no longer use the “Chevron deference” to assert wide-ranging control over the US crypto market.

“For better or worse—the Commission will not be able to claim the benefit of Chevron deference to defend its aggressive and atextual interpretation of its statutory authority,” the letter states.

“There is no reason to spend the Commission’s limited resources on that issue, or to force the industry to do the same.”

The letter also takes aim at the SEC's recent lawsuit against Uniswap, which alleges that the company acted as a securities broker without registering with any financial regulatory body.

According to the SEC’s charges, Uniswap provided crypto trading services that are subject to federal securities law.

However, Uniswap Labs is now arguing that the SEC's lawsuit is based on an overly broad interpretation of the securities laws and that the agency is overstepping its authority.

“The SEC has chosen to pursue a sprawling, multi-front legal campaign that will have the perverse effect of harming the very investors the agency purports to protect,” the letter adds.

“The Commission should reconsider its approach and focus on applying the law as written by Congress, rather than attempting to expand its jurisdiction through the courts.”

The back-and-forth between Uniswap Labs and the SEC is likely to continue in the coming months as the two sides battle over the future of crypto regulation in the United States.

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