Uniswap Labs, the entity behind the decentralized exchange Uniswap, has issued a robust response to the Wells Notice from the U.S. Securities and Exchange Commission (SEC), challenging the regulatory body's legal basis. The move comes as Uniswap's native token UNI experiences a notable surge in value, rising by 2.0% in the past 24 hours and 37% over the week to reach $9.48.

In a blog post dated May 21, Uniswap Labs criticized the SEC's rationale behind the notice, labeling it as "weak." The company outlined several reasons why it believes the SEC's pursuit of legal action should be reevaluated. Chief Legal Officer Marvin Ammori argued against the SEC's assumption that all tokens are securities, emphasizing that tokens primarily serve as a file format for value and are not inherently securities.

Ammori further criticized the SEC's attempt to redefine terms such as "exchange," "broker," and "investment contract" to encompass Uniswap's operations. He cited a recent federal judge's ruling dismissing similar claims against the Coinbase Wallet as evidence that the SEC's accusations may not hold.

Despite the Wells Notice, Uniswap expressed its preparedness to engage in legal action and defend against any charges, highlighting its legal team's successful representation in past cases involving entities like Grayscale and Ripple. Uniswap's lawyers warned of potential consequences, including driving American crypto investors to foreign trading platforms and stifling future innovation in financial markets.

Uniswap's response coincides with the upcoming vote in the U.S. House of Representatives on the Financial Innovation and Technology for the 21st Century Act. This bill seeks to redefine the regulatory roles of the SEC and the Commodity Futures Trading Commission (CFTC) regarding cryptocurrencies. Uniswap believes that if enacted, this legislation could render the SEC's case irrelevant, with enforcement authority potentially shifting to the CFTC in certain areas.

The Wells Notice received by Uniswap in April has sparked disappointment but not surprise, according to Ammori. He criticized the SEC for lacking clarity and guidance on Uniswap's self-custodial, non-intermediated products. This development follows similar regulatory actions against Coinbase and plans for legal action against trading platform Robinhood by the SEC.

As Uniswap Labs continues to defend its position against the SEC, the cryptocurrency industry awaits further developments amidst ongoing regulatory scrutiny.