Defi exchange Uniswap has received a warning of an impending enforcement action enacted by the U.S. SEC.

On April 10, Uniswap disclosed a Wells notice issued by the SEC’s Enforcement Division. The notice is part of a broader crackdown on crypto by the securities watchdog, as chair Gary Gensler insists that most digital assets issued on blockchains fall under existing financial laws.

Gensler has often referred to crypto as the “Wild West” and has sought to reign in the industry through enforcement action. 

Uniswap founder reacts

Uniswap founder and CEO Hayden Adams wrote on X that he was annoyed and disappointed but ready to fight the SEC and protect his company.

In a blog post discussing the SEC’s notice, Uniswap also refuted claims that most cryptocurrencies constitute investment contracts. Like several in the industry, including Coinbase, the DEX argued that the overwhelming volume of traded tokens is stablecoins, utility tokens, and commodities like Bitcoin (BTC) and Ethereum (ETH).

“Despite SEC rhetoric that “most” tokens are securities, the reality is that tokens are a digital file format, like a PDF or spreadsheet, and can store many kinds of value. They are not intrinsically securities, just as every sheet of paper is not a stock certificate. We are confident that the products we offer are not just legal – they are transformative.”

Uniswap’s April 10 blog post

According to DefiLlama, Uniswap is the largest defi exchange and holds over $6.2 billion in total value locked across 16 individual blockchains. CoinGecko data showed that the DEX handles 22.5% of all cryptocurrency trading volume.

Following the news, the UNI token declined by over 9% and traded for around $10, per CoinMarketCap.