SEC Drops Uniswap Investigation as Crypto Crackdown Fizzles

SEC Ends Uniswap Probe Without Action

On February 25, 2025, Uniswap Labs, the team behind the leading decentralized exchange Uniswap, announced that the SEC had concluded its multi-year investigation without pursuing any penalties. The probe, which began in April 2024, focused on whether Uniswap operated as an unregistered broker and facilitated trading in unregistered securities. It also examined Uniswap’s native token, UNI, for potential securities violations.

Following the announcement, Uniswap Labs issued a statement emphasizing its commitment to compliance. "The SEC’s decision this week reaffirms what we’ve always known: Uniswap Labs operates in full compliance with all applicable laws," the company stated. The outcome is widely seen as a victory for decentralized finance (DeFi) platforms, which have long faced uncertainty over regulatory oversight.

A Broader Pattern of Regulatory Retreat

The SEC’s decision to drop the Uniswap case is part of a wider pullback in crypto enforcement actions. In recent weeks, the agency has also closed investigations into Robinhood and Coinbase without pursuing charges.

On February 24, 2025, Robinhood disclosed that the SEC had ended its probe into its cryptocurrency operations. The investigation had examined whether the company failed to register certain crypto assets as securities. Robinhood’s Chief Legal Officer, Dan Gallagher, welcomed the decision, calling it a "validation of our approach to compliance."

Coinbase, another major exchange, has also seen a favorable regulatory outcome. The SEC is reportedly in the process of dismissing its case against Coinbase, which alleged the company was running an unregistered securities exchange. If formally approved by the SEC commissioners, the decision would mark a significant reversal from the aggressive stance the agency took in 2023 when it sued Coinbase over these allegations.

These developments suggest a strategic shift within the SEC, moving away from the hardline enforcement approach taken under previous leadership.

Political and Industry Factors Behind the Shift

The decline in regulatory actions coincides with a change in the U.S. administration, which has taken a more favorable stance toward crypto and tech industries. Several high-profile legal cases involving major technology and cryptocurrency firms have been dismissed, aligning with broader deregulation efforts.

Observers note that the administration has received significant political contributions from tech industry leaders, including Elon Musk, whose businesses have also benefited from dropped federal cases. While the SEC maintains that its enforcement decisions are independent, critics argue that political considerations are playing a role in the agency’s softened approach.

Industry leaders and advocacy groups have welcomed the change. Amanda Tuminelli, Chief Legal Officer of the DeFi Education Fund, praised the SEC’s course correction. "This is clear confirmation that the previous SEC leadership failed to properly protect American consumers, innovators, and markets. The new leadership is moving quickly to correct those mistakes," she said.

What This Means for the Future of Crypto Regulation

The SEC’s decision to step back from aggressive enforcement against crypto firms could signal a turning point for the industry. Without the constant threat of legal action, companies may have more room to innovate and expand operations in the U.S. However, questions remain about the long-term impact of this shift. Critics warn that easing regulatory pressure could increase risks for investors, particularly in areas like DeFi, where consumer protections are still evolving. Others argue that a more balanced regulatory approach is necessary to foster responsible innovation while ensuring market integrity.

For now, the closure of the Uniswap investigation, along with similar decisions affecting Robinhood and Coinbase, suggests that the SEC is rethinking its approach to crypto regulation. As the industry adapts to this changing landscape, the focus will now turn to whether legislative efforts, such as new crypto-specific laws, will emerge to provide clearer regulatory guidelines.

With the SEC pulling back on enforcement, the next phase of crypto regulation may come from Congress, where lawmakers continue to debate the best path forward for overseeing digital assets.