Uniswap to Conduct On-Chain Vote Despite SEC Scrutiny

Uniswap, leading DeFi exchange, recently revealed that it will be conducting an on-chain vote beginning from May 31 regarding the automation of fees. This decision comes despite the company receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC) over perceived violations of U.S. securities laws.

Also read: Uniswap Has Announced That Candlestick Charts Have Gone Live on the Network

The exchange said that this innovative voting mechanism will decrease the strain on Uniswap Governance and, at the same time, preserve the credibility of the DeFi protocol.

🗣️ Next Friday, May 31, the UF will initiate the onchain vote to upgrade the Protocol so that its fee mechanism can reward UNI token holders that have staked and delegated their tokens.

If you are a UNI holder who wants to vote on this proposal, you **must** have your UNI…

— Uniswap Foundation (@UniswapFND) May 24, 2024

Uniswap Initiates Automated Fee Collection System

The vote will focus on the creation of a system to automatically collect and distribute fees in the Uniswap V3 pools. In a blog post, the Uniswap Foundation noted that such a process would help to lighten the load of governance while keeping the integrity of the protocol intact. Only those users who have staked and delegated their UNI tokens will be allowed to vote.

Also read: Uniswap Marks $4B Mobile Swaps, Brings L3 Projects Soon

The public has also been informed of the vote through the company’s website and social media pages. The foundation also stated that additional voting will be required to fully enable fee collection on Uniswap V3 pools.

Uniswap Responds to SEC’s Wells Notice

On May 22, the SEC sent a Wells Notice to Uniswap, indicating that its current business model could be considered a violation of U.S. securities legislation. In response, Marvin Ammori, Chief Legal Officer at Uniswap Labs, clarified that Uniswap is in compliance with U.S. law and argued that the SEC should not target assets and individuals beyond its purview. As Ammori observed, about 75% of the Uniswap traffic and nearly 90% of the trading volume are from outside the United States.

Today we responded to the SEC’s Wells notice

We believe DeFi is revolutionary and we’re going to fight to protect it

Summary of our response and the full 40 page document here:https://t.co/u4fEWHVMVu

— Uniswap Labs 🦄 (@Uniswap) May 21, 2024

Uniswap has also assured the public that it is willing to engage in a legal battle against the SEC should the need arise. In response to the Wells Notice, the exchange was able to give elaborate answers to the arguments raised by the SEC, asserting that the legal grounds are flimsy.

UNI Soars Amid Voting Announcement 

After the announcement of the on-chain vote, the token of Uniswap, which is called UNI, experienced a sharp increase in value. UNI rose close to 6% on Saturday and was up over 45% on the week on Binance. At the time of writing, UNI is trading at $11.06. The price is up by 9.06% in the last 24 hours. 

Uniswap CEO Hayden Adams also addressed the regulation laws in the crypto industry. The CEO warned President Joe Biden about his administration’s approach to cryptocurrencies. 

Adams said that this approach has led to growing conflicts between the regulators, politicians, and crypto enthusiasts. Furthermore, Uniswap Labs has recently presented a new approach on how to measure price improvements in the Order Flow Auctions (OFAs).

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Cryptopolitan reporting by Damilola Lawrence