Crypto industry reacts to SEC serving Uniswap with Wells Notice: ‘The war on DeFi has begun’

Uniswap UNI -10.60% Labs revealed today that the U.S. Securities and Exchange Commission had served it with a Wells Notice, indicating a potential incoming lawsuit. 

Unsurprisingly, the crypto industry is interpreting this as a significant attack.

“This is the big one folks,” posted Bankless co-founder Ryan Adams on X. “Massive escalation by the SEC and whitehouse. Uniswap is a poster child for crypto decentralization - instead of celebrating Hayden Adams as a generational entrepreneur they're taking him to court. A war on crypto is a war on the internet.”

While many teams building decentralized projects have opted to steer clear of the U.S., both in location and banning its citizens from accessing their frontend applications, Uniswap Labs decided to stick with its country of origin. Its stance has been that it operates a front-end website that provides access to the Uniswap protocol, code running on Ethereum that it does not directly operate. However, this always created the risk that it would be a prime target for any regulatory agency that wanted to crack down on the decentralized finance industry.

While the SEC has had some cases involving decentralized organizations, this is the first time it has gone after a major protocol.

“The war on DeFi has begun, we must bring privacy onchain and continue to build censorship resistant systems,” posted The Rollup co-founder, who goes by Andy on X.

Many in the crypto industry expressed support for Uniswap and its founder, Hayden Adams. A common theme was the industry’s dislike of SEC Chair Gary Gensler. 

“We are all team Uniswap today. DeFi is worth fighting for. Sovereignty is a noble endeavor, and the transparency of blockchain technology and software is unrivaled by traditional systems. This will be a landmark for all of us,” said A.J. Warner, chief strategy officer at Offchain Labs.

Some expressed strong support for Uniswap Labs in the case of a potential trial. "I'm sorry you have to fight this battle on behalf of everyone in DeFi, but I couldn't possibly have more confidence in you and your team to prevail," said Jake Chervinsky, chief legal officer at Variant Fund, in a reply to Adams on X.

Others simply asked for clear regulation to enable the crypto industry to thrive in the U.S. rather than finding success around the rest of the world.

“Fair and transparent rules that allow technology to thrive is all we ask for,” posted Vishal Gupta, former Head of Exchange at Coinbase.