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Is the Uniswap lawsuit with the SEC settled? Legal experts point out potential reasons for the SEC's potential defeat.

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Is the Uniswap lawsuit with the SEC settled? Legal experts point out potential reasons for the SEC

The U.S. Securities and Exchange Commission (SEC) has issued a Wells Notice to Uniswap Labs, indicating potential litigation. Last March, Coinbase also received a Wells Notice and entered into a long legal battle with the SEC. This article summarizes the perspectives of legal experts in the cryptocurrency field on this matter.

Uniswap Receives Wells Notice, Founder Vows to Fight SEC

Don't Panic, Uniswap Users

Bill Hughes, senior legal counsel at Consenys, pointed out that the SEC first needs approval from 5 members of the commission, including Gary Gensler, in order to file a lawsuit.

However, based on the SEC's internal vote on the Bitcoin ETF, it is likely that only Hester Peirce and another commissioner who support the crypto industry will vote against, making the lawsuit almost certain at 3:2.

Bill Hughes urges everyone not to panic as the SEC is highly unlikely to charge UNI holders or protocol users.

Gary Gensler Acknowledges Approval of ETF Due to Grayscale Lawsuit Loss: Not a Bitcoin Endorsement

Former SEC Executive: Uniswap's Response is Poor

Former SEC Internet Enforcement Director John Reed Stark mentioned that institutions receiving Wells notices typically have the opportunity to explain to the SEC.

He is not surprised that Uniswap received a notice, but he is surprised by the institutions receiving these notices always responding to the SEC in a harsh and insulting manner, and it seems Uniswap is starting to do the same.

He stated:

Any SEC lawyer would agree that responding to a Wells notice with insults towards the SEC is a weak and foolish strategy. Expect SEC enforcers to submit a detailed, powerful accusation to federal court and win in a typical summary judgment.

Arguments for Possible SEC Defeat

Former legal counsel at Delphi Labs, Gabriel Shapiro outlined several possibilities.

He believes the SEC will win on the issue of "UNI as a security," but if the SEC accuses Uniswap of being a "broker," they will lose.

Paul Grewal, Chief Legal Officer at Coinbase, holds a similar view, citing a federal judge's ruling in March that the SEC failed to prove that Coinbase engaged in broker-related activities through Coinbase Wallet.

Bankless released a meme mocking Gary Gensler's inaction regarding this event.