The SEC and Its Next Attack on Crypto
How the crackdowns on crypto may shake up the decentralized landscape, and what it may signal in the times to come
BLOCKCHAINDEFI
SOL Spark
4/27/20243 min read
The SEC is no stranger to attacking the decentralized sector for a myriad of reasons, whether its because of tokens being considered securities instead of currency, or commodities, KYC not being utilized by centralized exchanges, or platforms not being registered as broker dealers.
Ethereum has come under fire because of being labeled a security, despite the fact that it has been ruled that it is not.
Ripple and XRP has come under fire for a similar reason, though it has been ruled that XRP is not a secutiry so long as it is sold to the general public instead of institutional investors.
Now Metamask and Uniswap have has been targeted by the SEC.
Metamask is being targeted becuase it is being labeled as an "unregistered broker", while Uniswap is being targeted because of "information about Uniswap’s marketing and investor services."
According to Coindesk, "Uniswap’s COO Mary-Catherine Lader and Chief Legal Officer Marvin Ammori told reporters that the content of the Wells notice was focused on Uniswap acting as an unregistered securities broker and unregistered securities exchange. It remains unclear whether Uniswap’s native token, UNI, was implicated as a potential security in the SEC’s notice." In laymen terms, Uniswap is supposedly acting illegally, which the founder argues against, and plans on launching a lawsuit against the SEC.
"Uniswap CEO Hayden Adams announced the receipt of the so-called Wells notice on X, saying he wasn’t surprised, 'just annoyed, disappointed, and ready to fight.'"
In Metamask's case, it is being targetted because of its staking and swapping services going against regulations. Ledger Insights reports that "Consensys received an SEC “Wells Notice” warning of an imminent enforcement action. This was on the grounds that the SEC believes the MetaMask Swaps and Staking services violate federal security laws because Consensys is not a broker dealer.
Consensys argues it is simply providing a user interface enabling access to other services such as decentralized exchanges (DEXs) and staking protocols. The SEC has also sent a Wells Notice to Uniswap, the leading DEX..." The fact that the SEC has had multiple instances in the past where they aren't able to rule correctly about regulation due to the lack of consistent transparency, and their words have more often than not fallen short in the past, considering that Ethereum and Ripple have fought in court and won on the pretenses that their currencies are not securities.
Considering that this isn't the first time that the SEC has tried to upend decentralized projects, its apparent that there is some form of instigation or behind the scenes tomfoolery that is causing such a stir, especially considering that half the time the SEC is unable to provide a solid defense for their wells notices or enforcement actions.
Personally, I think that its the governments tactic of scaring people out of crypto because of them "cracking down" is a means to get bigger investment giants a better position within the markets that they are influencing. This should be a cause for concern because the SEC and other government officials focusing anti crypto efforts shows that there's a fight ahead for crypto and the decentralized landscape as a whole. Considering that this is taking place after the bitcoin halving, it is no surprise that the US government is attempting to shake things up despite not having transparent regulations being set forth in a more concrete manner.
Until this is fully realized, it's best to be careful as to what more might take place in the markets, as this shakeup signals the beginning of a potentially long list of suits that will follow for other platforms and projects within the web 3 landscape.
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