The US Securities and Exchange Commission (SEC) is preparing to sue Uniswap Labs, the developer company of the largest decentralised exchange Uniswap. Uniswap Labs announced in an official statement that it received a Wells notice from the SEC.

The Wells notice is an official document issued by the SEC as a result of an investigation process, when the SEC is considering filing a lawsuit against an individual or company.

Emphasis on “political effort”

Uniswap Labs stated that all of its existing products will continue to function normally and will continue to develop new products. The company described the lawsuit as a “political effort to target the best actors developing technology on blockchains”. In addition, the statement said, “If the SEC attacks new and transparent technologies that can create opportunities for Americans, reduce costs, the US lags behind innovation that can strengthen consumer freedom. We are disappointed that we may have to fight a US government agency to protect innovation and economic freedom.”

“The law is clear, the SEC has no authority”

Uniswap Labs argued that the law is clear, the SEC only has jurisdiction over assets in the legal “investment contract” class. Emphasising that the court decision in the SEC and Ripple case clearly shows that secondary market transactions in digital assets do not constitute investment contracts, the company said, “The assets traded in the Uniswap protocol are assets of this type.”

Finally, the statement said:

“We are confident that our products are on the right side of the law and our work is on the right side of history.While our legal team continues this fight, we will continue to do what we do best: Building.”

Uniswap’s UNI token fell by about 8% in the first minutes after the news.