SEC drops its Uniswap investigation

The Securities and Exchange Commission (SEC) has ended its investigation into Uniswap, the world’s largest decentralized crypto exchange, without filing charges, according to a Tuesday report by the Wall Street Journal.

The case, which had been going on since April 2024, was being closely watched by the crypto industry as a potential test of how US regulators planned to handle decentralized finance (DeFi) as a whole.

In April, the SEC issued a Wells notice claiming that Uniswap Labs operated as an unregistered broker, operated an exchange, and issued an unregistered security

As of yesterday, that investigation has officially been closed, and the SEC is taking no enforcement action

This is a…

— Uniswap Labs 🦄 (@Uniswap) February 25, 2025

The SEC, under Gary Gensler, had of course been investigating whether Uniswap Labs was operating as an unregistered securities exchange and whether its UNI token fell under the definition of an illegal securities offering. The agency had issued a Wells notice to Uniswap Labs in April, a step that usually means imminent enforcement action. But after months of back-and-forth, the case is officially over.

Uniswap fought back against SEC charges

Uniswap pushed back hard against the SEC’s claims. In May 2024, the company filed a 40-page response to the agency, arguing that its protocol did not meet the legal definition of an exchange under existing US law.

Marvin Ammori, the company’s chief legal officer, said, “The SEC’s entire case rests on the false assumption that all tokens are securities. Tokens are, in fact, simply a file format for value.”

Ammori also argued that for the SEC to regulate Uniswap under existing securities laws, it would have to unilaterally redefine key legal terms like “exchange,” “broker,” and “investment contract.” That, he claimed, was beyond the SEC’s authority.

As Uniswap was fighting the SEC, it came under scrutiny from another regulator—the Commodity Futures Trading Commission (CFTC). In September 2024, the CFTC filed and settled charges against Uniswap Labs for violating US commodity trading laws.

The agency ruled that Uniswap had illegally offered leveraged or margined retail commodity transactions through its platform. Unlike the SEC, which was focused on securities law, the CFTC targeted specific trading products on Uniswap that allowed users to gain leveraged exposure to digital assets like Bitcoin and Ethereum.

Uniswap paid a $175,000 fine and agreed to cease and desist from further violations of the Commodity Exchange Act (CEA). The fine was relatively small, but it was a clear signal that regulators weren’t ignoring DeFi trading activity.

Ian McGinley, the CFTC’s director of enforcement, made that much clear. “DeFi operators must be vigilant to ensure that transactions comply with the law,” he said at the time.

The CFTC’s enforcement order found that Uniswap Labs developed and deployed a blockchain-based trading protocol that allowed users to create and trade liquidity pools on Ethereum. Some of those pools included leveraged tokens, which the agency ruled were illegal for retail traders under US law.

“The order finds these leveraged tokens are leveraged or margined commodity transactions that did not result in actual delivery within 28 days and therefore can be offered to non-Eligible Contract Participants only on a board of trade that has been designated or registered by the CFTC as a contract market, which Uniswap Labs was not,” said CFTC.