Decentralized exchange (DEX) Uniswap has raised its swap fee from 0.15% to 0.25% for interface trade, according to a new update on Uniswap’s website. The firm cites that the charge will be used to “sustainably fund” its operations.
Uniswap’s fee increase may be part of a preparation for a legal battle with the SEC.
However, not all swaps will be affected. Certain transactions, like swapping stablecoins with the same value or converting between Ethereum and wrapped Ethereum (WETH), are exempt from the fee increase.
Some Will Pay More on Uniswap
Users can avoid the fee by using other interfaces to access Uniswap, although transactions on the main network and some secondary networks will still incur the fee. Uniswap also notes that the fee increases are separate from the Uniswap Protocol fee switch, voted on by Uniswap governance.
Last month, Uniswap initiated a temp check to vote on a fee switch that aims to reward those who have delegated or staked Uniswap’s native token, UNI. The temp check resulted in 100% of votes favoring the proposal, representing 55 million UNI tokens.
The latest fee increase was updated four days ago, matching the date the firm received a Wells Notice from the U.S. Securities and Exchange Commission (SEC). Some experts believe this is Uniwap’s strategic move to build financial reserves for a potential legal battle with the SEC.
Last week, the SEC issued a Wells Notice against Uniswap, threatening legal action. Uniswap Labs CEO Hayden Adams confirmed the information, saying he wasn’t surprised. Adams vowed to fight back.
Uniswap Says it is Above Board
Uniswap’s founder stressed that the firm’s products are legal. He criticized the SEC for not issuing management regulations but instead taking litigation actions against many large companies in the cryptocurrency industry.
Adams declared that he was ready to enter this legal battle with the SEC , and even if it took years of litigation or Uniswap had to bring the case before the US Supreme Court, it would not surrender.
While the SEC hasn’t revealed its specific reasons for targeting Uniswap, Uniswap’s Chief Legal Officer, Marvin Ammori, hinted that the SEC’s arguments are based on the same securities classification methods. Ammori suggests the SEC may aim to classify Uniswap as an unregistered securities exchange and broker-dealer.
In a blog post published the same day, Uniswap argued that the U.S. regulatory landscape lacks a clear framework for cryptocurrencies. They point to the absence of case law regarding crypto exchanges or brokers being classified as securities processors. Additionally, Uniswap maintains that its UNI token doesn’t satisfy the Howey Test criteria for being considered a security.
The cryptocurrency community largely views the SEC’s action against Uniswap with pessimism. This is likely because Uniswap is seen as a prominent figure in DeFi. Some even fear this is the opening salvo in a broader “war” on DeFi. However, there’s also strong support for Uniswap’s stance.
Uniswap is the first DeFi that potentially faces a legal lawsuit with the securities agency.
Under the leadership of Chairman Gary Gensler, the SEC has actively targeted a range of individuals and organizations, including failed companies like FTX and Terraform Labs (LUNA-UST), as well as established players like Kraken, Coinbase, and Binance.
The SEC frequently employed a securities law argument to pursue these cases.
Currently, the SEC’s legal battles with Coinbase, Binance, and Ripple are ongoing, despite mounting criticism against the SEC’s arguments. In March, rumors swirled about the SEC investigating Ethereum, sparking concerns about potential legal action against the world’s second-largest cryptocurrency.
Shortly after the SEC issued the warning, the UNI token dropped by 18% . It is currently trading at around $7.4, up around 10% in the last 24 hours, according to data from CoinGecko. The token has lost around 34% of its value in the last 7 days.
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