The US Securities and Exchange Commission (SEC) is investigating Uniswaps Labs, the startup behind the leading decentralized exchange (DEX), reported The Wall Street Journal on Friday, citing people familiar with the matter.

According to the report, enforcement attorneys are seeking information about how people use the DEX and how it is marketed.

The agency, however, didn’t confirm or deny the investigations to the news outlet. But the report says the investigation appears to be in its early stages and may not even result in any formal allegations of wrongdoing.

This comes as regulators probe further into the cryptocurrency market, going for the decentralized protocols which don't have any middleman and provide direct access to investors without any broker.

SEC Chair Gary Gensler recently said that decentralized finance (DeFi) projects are not immune from oversight. He also called on lawmakers to give the SEC more power to oversee these platforms.

The absence of clear investor protection obligations means “the investing public is left vulnerable,” said Gensler this week.

Gensler has repeatedly said that the agency could regulate DeFi, and they even have a “fair amount of centralization” in terms of governance, fees, and incentives and called DeFi a “bit of a misnomer.”

Uniswap Labs, however, is “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry,” a Uniswap Labs spokesperson told The Journal.

You should assume every company that’s issued a token in the US has gotten an sec subpoena at this point and it also shouldn’t shock you https://t.co/3xtGtuFZV1

— THE UNITED CMS (@cmsholdings) September 3, 2021

“They went after a company building software. They don't operate the exchange. It's a very shitty precedent,” commented Banteg, a lead developer of DeFi blue-chip Yearn Finance. “Probably every DeFi project got hit at this point, even NFTs and full decentralization didn't protect Uniswap.”

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