The US Securities and Exchange Commission (SEC) has sent letters to several venture capital (VC) firms over their ties to the operator of Ethereum (ETH)-based decentralized exchange Uniswap, according to a report by online publication Axios.
Citing multiple sources, Axios says the SEC has sent letters to Andreessen Horowitz, Union Square Ventures and other venture capital firms about their ties to Uniswap Labs.
According to the online publication, venture capital firms have poured more than $170 million into Uniswap Labs since its inception. Andreessen Horowitz’s crypto-focused subsidiary, a16z Crypto, lists Uniswap in its investment portfolio. Uniswap is also listed as one of Union Square Ventures’ unicorn investments by venture capital data website VC Sheet.
The report on SEC correspondence with Uniswap Labs’ backers comes about four months after the US market regulator sent a Wells Notice to the Ethereum-based decentralized exchange. A Wells Notice is typically issued when the SEC is investigating an entity for possible violations of securities laws.
In response to the SEC’s Wells Notice, Marvin Ammori, Chief Legal Officer of Uniswap Labs, argued that the market regulator’s argument that the decentralized exchange violated U.S. securities laws was “weak and wrong.”
“…a token is just a file format, such as a PDF or JPEG. Tokens can represent any value, and predominantly represent commodities (BTC, ETH, stables) and memes and access to useful networks. PDFs are not necessarily stock certificates, and tokens are not necessarily securities.
Even when it comes to securities, the Uniswap protocol (and web app and wallet) does not fall under the definitions of “stock exchange” or “broker.”
By law, the Uniswap protocol should be specifically designed ‘for’ ‘securities’ – and that is not the case. It is general purpose, mainly used for raw materials.”
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