Uniswap wants SEC to drop proposed DeFi rules, citing Chevron ruling – London Business News

Decentralized exchange Uniswap is asking the U.S. Securities and Exchange Commission (SEC) to back away from regulating DeFi, citing a recent Supreme Court ruling that clips the wings of federal agencies.

In a letter sent to the SEC on Wednesday, Uniswap argued that the regulator’s attempt to bring DeFi under its umbrella now rests on shaky legal ground.

Here are the details of this crypto-regulatory showdown:

• Uniswap cited Supreme Court decision to strike down Chevron Doctrine
• SEC Proposed to Expand Definition of “Exchange” in April 2023 to Include DeFi Protocols
• Uniswap claims SEC proposal relies on “incredibly broad and unprecedented” interpretation of Securities Exchange Act of 1934
• DEX argues that courts are now “certain to conclude” that the SEC is extending its statutory authority too far
• Uniswap itself is facing enforcement action from the SEC, after receiving a Wells notice in April

“The SEC is going to have a hard time defending its aggressive interpretation of its authority now,” said Tobi Opeyemi Amure, an analyst at Tradequotex.com“This move by Chevron also highlights the flaws in how regulators like the SEC can operate, and it appears Uniswap is wasting no time in using it to fight back.”

The battle between Uniswap and the SEC is only getting hotter. At the heart of the issue is the SEC’s attempt to extend its reach into the DeFi sector. Last year, the regulator proposed expanding the definition of an “exchange” to include DeFi protocols like decentralized exchanges (DEXs).

SEC Chairman Gary Gensler did not mince words when he said: announced the proposalstating, “Make no mistake: many cryptocurrency trading platforms already fall under the current definition of an exchange and are therefore required to comply with securities laws.” It was a wake-up call for the DeFi industry, and Uniswap is fighting back.

Things changed last month when the nation’s highest court dropped a bombshell by striking down the Chevron Doctrine. The 40-year-old legal principle essentially gave federal agencies the benefit of the doubt when interpreting vague laws. It was a get-out-of-jail-free card for regulators seeking to expand their authority.

But now? That card has been torn up. The crypto industry was quick to celebrate the decision, seeing it as a potential check on what it sees as regulatory overreach. And Uniswap is wasting no time in using this new legal weapon.

In their letter to the SEC, Uniswap’s lawyers did not mince words. They argued that “there is now no realistic possibility that a court could uphold the proposed amendments if they were challenged.” In other words, they are telling the SEC: your move is illegal, and now we have the Supreme Court on our side.

This isn’t the first time Uniswap and the SEC have clashed. The DEX is currently facing an enforcement action from the SEC, after receiving a notice from Wells in April. Uniswap’s chief legal officer, Marvin Ammori, didn’t mince words, calling it an “abuse of power” by the regulator.

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