Report reaching that the Securities and Exchange Commission of the United States is investigating the fintech behind the largest decentralized crypto exchange in the world, Uniswap.
According to Wall Street Journal, the SEC has initiated a probe against the main developer of the Uniswap exchange, Uniswap Labs, on Friday.
In the report, it was revealed that the enforcement attorneys are currently looking for deep information about the investor and marketing services of the Uniswap exchange, citing anonymous sources that are known to be familiar with the issue.
Response from the startup’s spokesperson stated that “the firm is an ardent complaint of the regulations and laws guiding the crypto industry and they are ready to collaborate with the regulators at any time to provide information that will assist their investigations and inquiries.”
Uniswap rose to stardom for being a decentralized exchange that allows its users to swap ETH-based tokens and coins without any central entity. Altogether, the exchange is ranked as the largest decentralized exchange in the world with about $1.5 billion trading volume in 24 hours, according to information from CoinMarketCap.
A spokesperson from the SEC, however, denied the media outlet a comment on whether or not an investigation against the startup is possible.
This news came amid the shift in attention of the regulators to the decentralized finance industry after the SEC chair, Gary Gensler, announced that the plans of the regulatory agency to enforce rules in the crypto space focusing on DeFi, stablecoins, offerings, and tokens.
In August, the agency partnered with a blockchain analytics company, AnChain.Ai, in a deal worth $125,000 to get assistance in regulating and monitoring the DeFi industry. Before this effort from the SEC in July, Uniswap had already delisted close to dozens of tokenized stocks and other tokens from its trading platform, citing the increasing pressure from the regulatory agency.
“We are taking cognizance of the regulatory landscape,” Uniswap said, “and other DeFi players are doing the same.”
As it is defined, the DeFi industry is a form of finance based on blockchain technology that doesn’t rely on any centralized financial setup but facilitates transactions through an automatic protocol called Smart Contracts. The industry has seen massive growth as the total value has increased from 8 billion to $174 billion in the last year.
According to the principles of DeFi, DEX – Decentralized Exchanges like Uniswap are not supposed to have a person or organization running it as it operates and is supervised automatically or by the participants themselves.
A crypto investor, Alistair Milne, shared his thoughts in the DeFi industry. He said the government would not be able to completely shut the DeFi industry down, but they can only make its transactions illegal as it is with using a dark web for transactions.