Uniswap has come under the microscope of the Securities and Exchange Commission (SEC)

The U.S. Securities and Exchange Commission has launched an investigation into the world’s largest decentralized exchange, Uniswap

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According to

a

Wall Street Journal report, the SEC is looking at Uniswap

‘s

marketing and the services it offers to investors. This investigation comes just a month after the commission’s chairman – Gary Gensler claimed that the regulator has control over DeFi

platforms.

Uniswap is an Ethereum-based decentralized exchange that allows users to exchange tokens built on Ethereum. Unlike exchanges like Binance and Coinbase, Uniswap does not have a central entity. The project has gained immense popularity to become the undisputed leader in the DEX

space. Moreover, it can even rival some centralized exchanges in terms of volume. Sponsored Sponsored

In the last 24 hours, Uniswap has processed $1.62 billion. This is better than the trading volume of Bithumb, Kraken

, Bitfinex, and Binance.US. It also boasts of holding $2.9 billion in total blocked value (TVL).

Despite being a decentralized platform, Uniswap has now come under the microscope of the US Securities and Exchange Commission (SEC). According to anonymous sources, the regulator is looking into “how investors use Uniswap and how it is marketed.”

The SEC declined to respond to media requests, including from the WSJ, saying it neither confirms nor denies reports of an investigation. Meanwhile, a Uniswap spokesperson told the WSJ that it is “committed to complying with the laws and regulations governing the industry

and in providing regulators with the information necessary in any investigation.”

SEC can’t shut down Uniswap or any other DeFi platform

The Uniswap investigation is the SEC’s clearest indication yet that it intends to regulate the DeFi sector. From its inception, it was assumed that by its very nature, the DeFi sector was beyond the reach of regulators. After all, platforms like Uniswap are decentralized.

However, regulatory pressure has begun to affect DeFi as well. In July, Uniswap withdrew 100 tokens from its app interface. These tokens were only removed from the app, but they still remained on the Uniswap protocol, which is completely autonomous and immutable.

When the tokens were withdrawn, the platform suggested that this was due to regulatory pressure. Uniswap claimed it was constantly “monitoring the changing regulatory landscape” and trying to adapt to it.

Last month, SEC Chairman Gary Gensler gave an interview to the WSJ in which he commented on decentralized finance. He claimed that DeFi’s platforms have certain characteristics that make them remind him of the type of entities regulated by the SEC. Gensler stated:

There is still a group of people who not only write software like open-source software, but often include management and fees. For promoters and sponsors, there’s some incentive structure in the middle of that.

However, according to serial entrepreneur Alistair Milne, the SEC can’t shut down Uniswap or any other DeFi platform. It can, however, make the use of these platforms illegal, much like the dark net.

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