How the SEC's reported Uniswap Labs investigation could signal a new era of enforcement

Quick Take

  • The SEC is reportedly investigating Uniswap Labs, developer of the decentralized exchange Uniswap.
  • Regulators are attempting to catch up to DeFi — in the hopes of regulating what chair Gary Gensler has called the “Wild West.”
  • The investigation could herald a new era of crypto enforcement for the regulator.

The U.S. securities watchdog is reportedly investigating the development firm behind the biggest decentralized cryptocurrency exchange (DEX). 

The Wall Street Journal first reported on Friday that the Securities and Exchange Commission (SEC) are conducting a civil investigation into Uniswap Labs. According to WSJ, "people familiar with the matter" say enforcement attorneys are seeking information on how Uniswap is used and how the team behind it markets the platform.

A Uniswap Labs rep told the Journal that the firm is “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.”

More broadly, the news signals that the SEC's recent talk on decentralized finance or DeFi is translating into action -- and that a new era of enforcement is on the way. 

The letters

General Counsel for Delphi Labs Gabriel Shapiro said crypto-focused lawyers have been waiting for the dam to break on DeFi enforcement. 

"Lawyers in the space have been aware and talking for about a month about how DeFi projects are starting to get letters from the SEC, inquiries from other regulators, and this is just it becoming more public," he said. 

In addition to its inquiry into Uniswap, the SEC's division of enforcement recently sent letters to multiple startups as part of an effort to examine crypto lending services, according to the Journal. 

Sarah Brennan, a blockchain-focused lawyer with Harter Secrest & Emery LLP, said the new developments could signal the start of a larger theme of enforcement in this new era of the