The U.S. Securities and Exchange Commission (SEC) has dropped its year-long investigation into Uniswap Labs

The U.S. Securities and Exchange Commission (SEC) has dropped its year-long investigation into Uniswap Labs, ending a regulatory case that had raised concerns

The U.S. Securities and Exchange Commission (SEC) has dropped its year-long investigation into major decentralized exchange Uniswap, marking the end of a regulatory case that had raised significant concerns across the decentralized finance (DeFi) industry.

The SEC was investigating whether Uniswap functioned as an unregistered broker, exchange, and clearing agency while offering unregistered securities. However, after months of scrutiny, the case has been closed without further action.

This development follows a trend where the SEC is dropping multiple crypto-related enforcement cases, signaling a shift in strategy under the new administration of President Donald Trump.

The SEC's decision to close the investigation into Uniswap Labs and its flagship exchange comes after a year of speculation and anticipation within the crypto industry.

The probe, which began in February 2024, arose from the SEC's interest in Uniswap's activities within the DeFi space. The regulator's focus was particularly directed towards the exchange's token, UNI, and whether it was sold illegally during a 2023 token offering.

The SEC's investigation also aimed to determine if Uniswap acted as an unregistered broker, exchange, and clearing agency when facilitating the trading of cryptocurrencies on its platform.

This case was closely watched by crypto enthusiasts and professionals alike, as it was expected to influence the regulatory treatment of DEXs in the years to come.

Now that the SEC has dropped its probe, discussions on new DeFi regulations are expected to gain momentum.

Uniswap CEO Hayden Adams reacted to the news by saying that traditional finance (TradFi) regulations do not apply to DeFi and that new frameworks are needed.

“This is a huge win, not just for Uniswap Labs but for DeFi as a whole. I’m grateful that the new SEC leadership is taking a more constructive approach, and I look forward to working with Congress and regulators to help create rules that actually make sense for DeFi,” Adams said.

Following the SEC’s announcement, the UNI token saw a brief price increase and its daily trading volume went up by over 140%, according to CoinMarketCap data.

However, UNI’s price is still down 30% this month, despite major network upgrades. The launch of Uniswap v4 and the Unichain mainnet earlier this month did not provide lasting support to its value. As of February 26, UNI is trading at $8.287, according to TradingView data.

The end of the SEC probe removes a key regulatory concern, but market conditions continue to affect Uniswap’s token price.

The SEC's decision to close the case against Uniswap also marks the latest instance of the regulator dropping enforcement actions against crypto firms.

Recently, the Commission closed cases against Coinbase, Opensea, and Robinhood. The cases were initiated during the administration of former SEC Chair Gary Gensler, who took a firm stance against crypto companies.

However, under the new administration, the SEC appears to be stepping back from aggressive enforcement actions. The closure of the Unisoplan case aligns with this broader shift in regulatory strategy.

This development also sparks further discussion on the need for clearer regulations tailored to the unique characteristics of decentralized exchanges and the DeFi ecosystem as a whole.