The US Securities and Exchange Commission (SEC) officially closed its investigation into Uniswap Labs without taking enforcement action, according to a Feb. 25 statement.

The investigation, which began over three years ago, centered on allegations that Uniswap Labs operated as an unregistered broker, exchange, and clearing agency and issued an unregistered security. 

Uniswap Labs characterized the outcome as a victory for DeFi, reinforcing the argument that decentralized technology operates within the legal framework.

In April, the SEC issued a Wells notice to Uniswap Labs outlining potential charges based on claims that the firm engaged in unregistered securities activities. The investigation has concluded this week, and no further legal action is planned. 

Jake Chervinsky, chief legal officer at Variant Fund, congratulated Uniswap on a “clean bill of health from the SEC,” adding that “it’s a travesty” that major crypto players waste time and resources fighting regulatory overreach.

Following the news, Uniswap’s governance token UNI jumped roughly 5% from $7.87 to $8.28 based on CryptoSlate data.

Regulatory implications

Throughout the investigation, Uniswap Labs maintained that it does not operate as a broker, that the Uniswap Protocol does not constitute an exchange or clearing agency under US securities law, and that UNI is not a security. 

Hayden Adams, founder of Uniswap, criticized the SEC’s initial approach, describing it as part of a broader pattern of regulatory enforcement applied arbitrarily to DeFi projects without clear legal grounding.

Adams argued that the SEC attempted to impose a regulatory framework designed for centralized financial institutions on decentralized networks. This mismatch fails to recognize the structural differences between the two systems. 

He further emphasized that self-custodied funds and self-executing smart contracts on public blockchains provide transparency not present in traditional finance (TradFi) markets, making existing regulatory approaches ill-suited for DeFi.

According to Adams:

“This is a huge win, not just for Uniswap Labs but for DeFi as a whole. It reaffirms what we’ve said all along: that decentralized technology and self-custody are inherently different from the centralized, intermediated systems they aim to replace.”

He noted that the inquiry had placed a significant financial and operational burden on the company, diverting resources and causing stress associated with federal investigations. Adams described the experience as emblematic of a broader issue where the investigative process serves as a punitive measure, discouraging innovation within the US.

Looking forward, Adams expressed optimism about working with Congress and regulatory bodies to establish clear rules tailored to DeFi. He noted that emerging regulatory perspectives within the SEC appear to be shifting toward a more constructive approach.

However, he also reiterated the need for regulatory frameworks that recognize the unique nature of decentralized financial technologies while promoting transparency, access, and innovation.

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