SEC Launches an Attack on the DeFi Sector

The US Securities and Exchange Commission (SEC) launched an attack on the decentralized finance (DeFi) industry. Reports say that SEC began investigations on other DeFi Dapp platforms apart from Uniswap.

SEC Launches an Attack on the DeFi Sector
US SEC | Image: Financial Times

A source that wants to remain unknown as the news is still private said that the US SEC investigation into Uniswap Labs is part of a broader initiative against the DeFi sector. In short, regulators are making their way into DeFi platforms aside from Uniswap Labs. Besides, the source stated that the SEC became more focused on DeFi.

In addition, The Wall Street Journal also noted that SEC experts are analyzing records about Uniswap. They are also examining how investors interact with it. Based on reports, the investigation is still at an early stage. Hence, there are no details as of now.

According to the SEC website, this method does not forcibly head to any enforcement action. But within its structure, it can. For example, it can call witnesses to court to testify.

Also, Gabriel Shapiro, Delphi Labs General Counsel, noted that projects from the DeFi sector "are starting to receive letters from the SEC and requests from other regulators." In addition, he stated,

“Lawyers in this area have known and talked about this for about a month. […] Now everything just becomes public."

New York Times reported SEC's similar operations in 2017-2018 with respect to the organizers of the ICO.

Recently, the chairman of the U.S. SEC, Gary Gensler, promised a crypto crackdown as he considers the industry “like the Wild West.”