SEC Drops Investigation Into Uniswap Labs, Signaling Shift in Crypto Regulation

The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into Uniswap Labs without pursuing enforcement action

The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into Uniswap Labs without planning to take any enforcement action.

The news comes after the DeFi firm and its founder Hayden Adams faced criticism over the agency’s approach to crypto regulation.

SEC Drops Probe Into Uniswap Labs

Uniswap Labs, the company behind the popular decentralized exchange protocol, announced on February 25 that the SEC had concluded its multi-year probe into the firm.

Uniswap (UNI) reacts after SEC closes its case. Chart: TradingView

The investigation, which began in 2021, spanned three Chairmen and saw Uniswap Labs receive a Wells notice in April 2024.

The SEC’s probe focused on claims that Uniswap ran as an unregistered securities broker and exchange and that its UNI token is an unregistered security. The corporation regularly maintained throughout the inquiry that it does not function as a broker, that the Uniswap Protocol is neither an exchange or clearing agency under securities law, and that UNI is not a security.

Founder and CEO of Uniswap Labs Hayden Adams had hit out at the SEC’s attitude during the probe, which he characterized as “arbitrary enforcement” lacking in defined rules.

The investigation had seriously taxed the business both financially and practically, he noted.

“The SEC sought to assert that Uniswap Labs issued an unregistered security, operated an unregistered broker, exchange and clearing agent. Those assertions have since been dismissed,” Adams said on X in a post.

“We're grateful to the SEC's new leadership for closely examining the pending enforcement investigations and litigations across our industry, and for recognizing a more effective path to protect American consumers.”

Among the new administration’s priorities is rolling back what it views as an overexpansion of the administrative state and returning to a more limited vision of federal authority.

This attitude bodes well for crypto firms, as the lack of clear regulations has been a major point of contention for the industry.

Earlier this year, Gensler’s leadership saw the SEC move to ban spot Bitcoin ETFs despite overwhelming bipartisan support in Congress for such products.

Is This Due to US’s Pro-Crypto Regulatory Shift?

Closing the Uniswap case reflects similar trends at other cryptocurrency firms.

While working to dismiss its complaint against Coinbase pending commissioner approval, the SEC has also recently closed investigations into Robinhood Crypto and NFT platform OpenSea.

These developments coincide with what appears to be a notable shift in the SEC’s attitude toward crypto regulation following changes in leadership.

Known for his tough “regulation-by- Enforcement” approach against the cryptocurrency sector, former Chairman Gary Gensler stepped down in January following President Donald Trump’s inauguration.

Among the significant reforms Acting Chairman Mark Uyeda has implemented at the agency is the creation of a new Crypto Task Force headed by Commissioner Hester Peirce, a noted proponent of more transparent crypto policies. Additionally, the SEC’s dedicated crypto enforcement team has apparently been disbanded.

Impact on UNI Token

Despite broader market volatility, Uniswap’s governance token UNI/USD saw a modest increase, rising from $7.87 to $8.28 following the announcement.

Chief legal officer of the DeFi Education Fund Amanda Tuminelli observed that the SEC’s ruling “gives DeFi companies additional comfort to pivot from defending to embracing our right to build decentralized tech.”

The closure removes major legal ambiguity for Uniswap Labs, thus enabling the firm to focus on platform development—including its recently announced Uniswap v4.

What’s Next for Uniswap?

Working with Congress and the new leadership of the SEC, Adams expressed hope for clearer regulations tailored to DeFi’s unique qualities.

“We're grateful to the SEC's new leadership for closely examining the pending enforcement investigations and litigations across our industry, and for recognizing a more effective path to protect American consumers,” Uniswap Labs said in a blog post.

This shift in regulations seems to align with the broader perspective on digital assets being taken at the Trump administration. Reports prior to entering office indicated the administration might review pending crypto enforcement cases involving non-fraud activity in keeping with the conservative policy framework Project 2025, which advised eliminating “regulatory impediments” at the SEC.