Uniswap, a leading decentralized finance (DeFi) exchange, is set to conduct an on-chain vote on May 31, despite receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC) alleging potential violations of U.S. securities laws. The vote will focus on automating fee collection in Uniswap V3 pools, a move aimed at reducing the burden on Uniswap Governance while maintaining the integrity of the DeFi protocol.

The exchange has asserted its compliance with U.S. law and is willing to contest the SEC's claims. In a blog post, the Uniswap Foundation explained that the automated fee collection system will decrease the strain on governance and preserve the credibility of the protocol. Only users who have staked and delegated their UNI tokens will be eligible to vote.

The SEC's Wells Notice, sent on May 22, indicated that Uniswap's current business model may be considered a violation of U.S. securities legislation. However, Uniswap's Chief Legal Officer, Marvin Ammori, argued that the SEC should not target assets and individuals beyond its purview, citing that 75% of Uniswap traffic and 90% of trading volume come from outside the United States.

Uniswap has assured the public that it is willing to engage in a legal battle against the SEC if necessary. The exchange has provided detailed responses to the SEC's arguments, asserting that the legal grounds are flimsy. The Uniswap token (UNI) surged nearly 6% on Saturday and over 45% on the week on Binance, following the announcement of the on-chain vote.

Uniswap CEO Hayden Adams also addressed the regulation laws in the crypto industry, warning President Joe Biden about his administration's approach to cryptocurrencies. Adams stated that this approach has led to growing conflicts between regulators, politicians, and crypto enthusiasts.

Furthermore, Uniswap Labs has recently presented a new approach to measuring price improvements in Order Flow Auctions (OFAs). The on-chain vote marks a significant milestone in Uniswap's efforts to decentralize governance and automate fee collection, despite the regulatory scrutiny.

As the DeFi landscape continues to evolve, Uniswap's bold move sets a precedent for other decentralized exchanges to follow. The outcome of the on-chain vote will be closely watched by the crypto community, as it may shape the future of decentralized governance and automated fee collection in DeFi protocols.