The US Securities and Exchange Commission (SEC), a major financial regulator, has been closely examining the cryptocurrency industry. In response to this scrutiny, Uniswap Labs has taken the proactive step of submitting a detailed 40-page response to an SEC Wells notice.

Uniswap's Response to SEC

This action comes at a time when the SEC appears to be concentrating on the nature of Ethereum (ETH) and escalating its inquiries into prominent players in decentralized finance (DeFi). Despite this, Uniswap is urging the SEC not to take any legal action against them.

Marvin Ammori, Uniswap's chief legal officer, has stated that the SEC's case hinges on the incorrect assumption that all tokens are securities. He argues that tokens are essentially a means of representing value and suggests that the commission needs to update its financial terminology to regulate DeFi activities effectively.

In a blog post titled "The ongoing battle for DeFi," Uniswap has criticized the SEC's aggressive stances as an attempt to extend its authority beyond exchanges, potentially encompassing communication technology and various markets beyond securities.

The blog asserts that their legal arguments are feeble and have been dismissed by courts. They anticipate that the House will pass legislation granting the Commodity Futures Trading Commission (CFTC) broader powers to oversee digital asset trading.

The SEC contends that the Uniswap Protocol is an unregistered securities exchange under the control of Uniswap Labs. It further argues that the Uniswap interface functions as an unregistered securities broker-dealer and that the UNI token constitutes an investment agreement.

Market Developments

Despite the ongoing legal dispute, Uniswap remains confident in the righteousness of their actions. They, however, believe that the SEC should not allocate taxpayer resources to litigate against them.

During this period of legal contention, Uniswap's price has surged by 39% in the past week. The UNI price has risen by approximately 3% in the last 24 hours, currently trading at an average of $9.49. Although it remains 79% below its all-time high (ATH) of $44.97 from May 03, 2021, its 24-hour trading volume has decreased by 15% to $286 million, with a market capitalization of $5.66 billion.

The global cryptocurrency market experienced a significant upswing on Wednesday, with Ethereum's price increasing by over 20% in the last 24 hours.