Uniswap's Adams: Market-Making Firm 'Weaponizing' SEC to Classify DeFi Developers as Broker-Dealers

Source: CoinEdition Original Title: Uniswap’s Adams: Citadel ‘Weaponizing’ SEC to Classify DeFi Devs as Broker-Dealers Original Link:

Background

The dispute between decentralized finance (DeFi) and traditional financial institutions intensified Tuesday, with Uniswap Labs founder Hayden Adams accusing a major market-making firm of pressuring the Securities and Exchange Commission (SEC) to legally reclassify software developers as “centralized intermediaries.” This designation would impose significant compliance burdens on permissionless protocols.

Adams alleges that the firm is pushing the SEC to classify software creators of decentralized protocols as if they operated traditional institutions, a shift that would reshape how DeFi teams are treated under federal regulations.

Adams Points to Regulatory Pressure and “Fair Access” Dispute

Adams referenced what he described as long-running efforts to shape policy, asserting that the firm has been lobbying behind closed doors for years. He also linked the current dispute to previous tensions involving ConstitutionDAO.

A central point of contention involves claims that DeFi protocols cannot provide “fair access.” Adams publicly criticized this position, noting that the argument was striking given the firm’s role in traditional market-making. He argued that open-source systems lower barriers to liquidity creation in ways that differ from conventional trading environments.

Community Members Highlight Fragmented DeFi Landscape

Following Adams’ public remarks, developers and community figures weighed in on what they described as broader structural issues complicating policy discussions. Developer Armani Ferrante said the debate is often undermined by the absence of a clear definition of DeFi, noting that platforms range from fully decentralized exchanges to centralized entities that present themselves as decentralized.

He argued that some systems enable unequal market access and rely on trust rather than verifiable mechanisms, suggesting that policymakers and users should evaluate whether a protocol withstands extreme scenarios involving high-frequency trading actors.

Community observers added that Uniswap’s internal standards differ from many other projects, and that DeFi remains active because users in jurisdictions not favored by the United States can still interact with decentralized platforms.

SEC Enforcement Trend Forms the Backdrop

The exchange unfolded as the SEC continues to enforce securities laws against DeFi teams. In September 2024, the regulator settled charges with a DeFi protocol and its co-founders, alleging they misled investors and operated as unregistered brokers.

The SEC stated that it evaluates economic realities over decentralization labels and will hold individuals accountable when violations occur.