With the Supreme Court ruling late last month against the government-favored “Chevron Deference,” one crypto industry leader being targeted by the agency is already using the decision to its advantage.
In a letter to the Securities and Exchange Commission (SEC) on Wednesday, lawyers for Uniswap Labs said that the agency could no longer use the “Chevron deference” to claim broad authority over the crypto market.
Uniswap Claps Back At The SEC
The letter follows Uniswap’s comment letter to the SEC on June 13, criticizing a proposal from the SEC last year to expand the legal definition of “exchange” to encompass decentralized finance (DeFi) protocols.
Uniswap Labs is the developer of the world’s largest decentralized exchange (DEX), and therefore would be legally beholden to the SEC under such amendments.
At the time, Uniswap said the SEC’s legal readings were “staggeringly broad and unprecedented”, and “unlikely to survive a judicial challenge.” Today, they say the SEC’s decision in the Loper Bright case delivered on June 28 solidifies that.
“For better or worse—the Commission will not be able to claim the benefit of Chevron deference to defend its aggressive and atextual interpretation of its statutory authority,” wrote Uniswap Labs. “There is no reason to spend the Commission’s limited resources on that issue, or to force the industry to do the same.”
The Chevron deference was a 40-year-old Supreme Court doctrine that left administrative agencies like the SEC wiggle room to interpret certain laws left vague by Congress. Indeed, many of the SEC’s legal arguments against crypto firms have been criticized for leaning on overly broad interpretations of securities law.
SEC’s Arguments Dead Without Chevron
Without the Chevron deference, Uniswap says the SEC’s proposal requires a much less forgiving interpretation of the law to give it power over the crypto markets. The lawyers wrote:
“If the Commission moves forward with its proposed amendments, a reviewing court “exercis[ing] independent judgment in determining the meaning of [the Exchange Act’s] provisions” is certain to conclude that the Commission’s interpretation of the Exchange Act stretches the statutory text too far.”
Uniswap Labs received a Wells Notice from the SEC in April warning that the DEX creator may be violating U.S. securities laws by operating an unregistered securities broker-dealer through its app interface.
Uniswap issued a 40-page response one month later claiming that the SEC was stretching the definitions of securities, exchanges, and contracts.
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