The United States Securities and Exchange Commission (SEC) has issued a Wells notice to the decentralized exchange Uniswap.

On X (formerly Twitter), Uniswap’s chief legal officer Marvin Ammori confirmed the regulator’s notice on April 10. “Today’s Wells notice against @Uniswap is disappointing, but is not unexpected from this SEC,” Ammori wrote, arguing that:

“If the SEC had authority over our self-custodial, non-intermediated products, it could tell us how to register them. It can't and so it doesn't. It has provided no clarity and no guidance – as several SEC commissioners have stated in multiple dissents.”

A Wells notice is a formal notification issued by the SEC to inform a company or individual that the regulator’s staff intends to recommend enforcement action against them. This notice gives the recipient an opportunity to provide a written explanation or argument (a “Wells submission”) as to why such action should not be taken.

Uniswap enables automated token exchanges on the Ethereum blockchain, allowing users to swap several crypto tokens without needing traditional intermediaries like centralized exchanges. 

The SEC has been investigating Uniswap Labs, Uniswap’s main developer, since 2021. The DEX has previously delisted several tokens from its platform, citing growing regulatory pressure.

Related: What is a Wells notice, explained

As part of its defense, Uniswap Labs previously claimed that it is only the software developer responsible for building the front-end portal to the app. The front-end is separate from the Uniswap protocol itself, which is autonomous code released for public use.

"The Uniswap Protocol, web app, and wallet don’t meet the legal definitions of securities exchange or broker," said Ammori, adding that the protocol welcomes “regulations for crypto – and clear rule of law that we expect in the US – not arbitrary enforcement and continued abuse of power.”

The SEC has issued similar notices in the past, warning about legal actions against crypto exchanges Coinbase and Binance.

While the U.S. SEC unveils its latest legal action against crypto protocols, the European Union is advancing its Markets in Crypto-Assets (MiCA) regulation over DeFi protocols, including their front-ends. 

The EU regulator is required to prepare a report by Dec. 30, 2024, assessing the feasibility of specific regulations for the decentralized finance market. The report will explore how decentralized systems, particularly those without a clear issuer or service provider, should be regulated in the region.