Uniswap fights back against SEC as the Ethereum crackdown continues
For years, the Securities and Exchange Commission has been cracking down on the crypto sector writ large, but in the last few months, the agency appears to have trained its sights on Ethereum, in particular. Some of the biggest names in decentralized finance are now fighting back.
In a 40-page filing on Tuesday, Uniswap Labs — which builds decentralized finance infrastructure including a popular DeFi crypto exchange that enables users to custody their own coins — details to the SEC all the reasons why the agency shouldn’t pursue legal action against them. It comes a few weeks after the commission issued Uniswap a Wells notice, warning the company that it identified potential violations of U.S. securities law.
“The SEC’s entire case rests on the false assumption that all tokens are securities. Tokens are in fact, simply a file format for value,” said Uniswap’s chief legal officer Marvin Ammori.
“The SEC has to essentially unilaterally change the definitions of exchange, broker, and investment contract in order to try to capture what we do,“ continued Ammori.
A Wells notice is typically one of the final steps before the SEC formally issues charges. It generally lays out the framework of the regulatory argument and offers the potentially accused an opportunity to rebut the SEC’s claims.
So far this year, the federal regulator has sent Wells notices, filed lawsuits, or reached settlements with a host of crypto firms, and the agency’s legal challenges are increasingly focused on ethereum and players working in decentralized finance, including ShapeShift, TradeStation, Uniswap and Consensys. It also comes as the agency is reportedly investigating the Ethereum Foundation.
CNBC reached out to the SEC about the recent batch of Wells notices sent out to crypto firms, and an agency spokesperson declined to comment.
In April, Consensys tried to preempt the SEC’s action with its own lawsuit, alleging regulatory overreach on the part of the regulator. The 10-year-old crypto firm said its suit followed three subpoenas issued last year, plus a Wells notice from the SEC that claimed the company was violating federal securities laws.
“This action is about the almost certainty that we hold that the SEC is trying to slow or kill ethereum, decentralization, disintermediation, and disintermediated technology in the U.S. and probably wouldn’t stop there with its long arm,” said long-time ethereum veteran Joseph Lubin, who went from co-founding the blockchain to launching and running Consensys.
“It might influence other nation states to do similarly draconian things,” continued Lubin.
Security vs. commodity
The recent spate of actions targeting major names working in the Ethereum ecosystem come ahead of a long-awaited decision on whether the regulator will approve or deny applications to launch spot ether exchange-traded funds.
To date, the agency’s stance on ether’s classification as either a commodity or a security remains uncertain.
“We think big banks like the way things are organized. We think certain factions of the U.S. government like the way they operate,” said Lubin. “Without explicitly stating their intentions, without public discussion and clear rule-making, the SEC seems to have decided to reclassify ether as a security without being able to utter that that’s what they’re doing.”
The industry argues if ether — the native token of the Ethereum blockchain — gets classified as a security, it could throw the future of the Ethereum network and many adjacent crypto firms into question. Exchanges, both centralized and decentralized, would be forced to choose between registering with the SEC, or delisting ether altogether.
“If the SEC, in fact, does take the position that Ethereum is a security, pretty much everyone in this business that is using or providing services of the Ethereum blockchain, they’re going to be on notice that they might need to be registered,” said digital assets attorney Christopher Gerold, who previously served as the chief of the New Jersey Bureau of Securities.
“Whatever protections they thought they had before are no longer going to be there, and we’re going to see a shift in the industry,” continued Gerold.
The head of litigation and investigations at Consensys told CNBC that they’ve been alarmed that the SEC has been targeting developers.
“They asked for a list of the names of any Consensys developers who contributed any coding to the merge,” said Laura Brookover.
The so-called merge was a years-in-the-making systemwide upgrade to the Ethereum blockchain that took effect in September 2022 and changed the way transactions are verified. The proof-of-stake model, which replaced the proof-of-work model, requires volunteers on the network to put up their ether tokens, or “stake” them, in order to secure the network.
Brookover says the agency has explicitly asked for the identities of public and private Consensys software developer code repositories.
“Those are very strange requests from a financial regulator,” continued Brookover. “I can speak to that, because I used to be in the CFTC’s enforcement division and investigated cases myself.”
Multiple coders and industry executives have told CNBC that it is possible the SEC could be taking more of an interest in Ethereum, because the regulator thinks its native token functions more like a security after the merge.
Brookover told CNBC that their suit asks the court to declare both that ether is not a security and that the SEC lacks jurisdiction to investigate Ethereum. Ultimately, the regulator will have to respond to the Consensys complaint in a legal filing.
“They’re going to be hard pressed not to stay in their answer whether they think Ethereum is a security or not,” said Gerold, adding that he suspects that the agency will take the position that it is a security because of the proof-of-stake change that took effect two years ago.
One thing the SEC has been clear on is its classification of bitcoin as a commodity. With ether, the narrative has changed.
In 2018, when Bill Hinman was still the Director of the Securities and Exchange Commission’s Division of Corporation Finance, he told CNBC that, “When we look at bitcoin or if we look at ether and the highly decentralized nature of the networks, we don’t see a third-party promoter where applying the disclosure regime would make a lot of sense.”
“So we’re comfortable…viewing these as items that don’t have to be regulated as securities,” continued Hinman.
In April 2023, when Rep. Patrick McHenry (R-N.C.) asked SEC Chair Gary Gensler whether ether was a commodity or a security, Gensler demurred.
SEC vs. crypto
Gensler has, in multiple interviews, repeatedly shared that he believes much of the industry already belongs under its jurisdiction, and its lawsuits are simply bringing the industry under compliance. Crypto firms argue that the recent legal battles haven’t given the regulatory clarity the industry has been seeking for years.
With the Uniswap Wells notice, for example, a source at the company told CNBC that dealing with the SEC was akin to “talking to a wall.”
For two years preceding the Wells notice, Uniswap described the protracted interactions with the agency as an opaque process that involved responding to multiple requests, including giving testimony and sending several documents to the agency, without getting much feedback about the regulator’s concerns around potential wrongdoing. This source also told CNBC they had not heard from the regulator at all in 2024 until the agency told them in a half-hour phone call that they would be receiving a formal notice.
Both Consensys and Uniswap suggest the SEC’s broad approach to classifying securities may be outdated.
“The SEC is arguing that the Uniswap protocol is an unregistered securities exchange, and that the Uniswap interface and wallet are both unregistered broker brokers,” Ammori said.
But Uniswap argues that the protocol itself is a general purpose computer program that anyone can use and integrate.
“So the protocol is not an exchange also, because under the law, it would have to be specifically designed for securities trading, and it is not,” continued Ammori.
Uniswap argues in its response to the SEC that the majority of its trading volume is obvious non-securities, like ether, bitcoin, and stablecoins.
“It’s not run by a group, as the definition requires, but as autonomous software no person or group controls,” added Ammori.
“The SEC knows that the current definition of exchange does not cover the protocol, or anything we do. That’s why as we speak, there’s a pending rulemaking, for the SEC is trying to redefine about a half dozen words in their own regulations to try to capture us,” contined Uniswap’s chief legal officer.
Alma Angotti, partner and global legislative and regulatory risk leader at the consulting firm Guidehouse, cautions that it is less clear whether decentralized exchanges function like an alternative trading system, or a market maker — or whether they really are just a technology that does not act as a broker dealer.
Meanwhile, as the SEC ramps up its focus on decentralized players in the crypto ecosystem, centralized players also remain under scrutiny by the regulator.
In May, investment platform Robinhood announced it received a Wells notice for the company’s crypto operations. The SEC has also sued Coinbase and Binance. With multiple pending legal challenges from the regulator and enduring uncertainty about the future of crypto regulation in the U.S., multiple crypto businesses have said they are considering decamping from the country altogether.
“We’ve got companies that are wasting resources trying to figure out, ‘Am I a broker dealer? Are these assets securities?'” said Binance’s former chief compliance officer, Christina Rea.
“We’re already having a hard enough time trying to get them to be compliant with other important laws — anti-money laundering laws, anti-bribery and corruption laws.”
On Thursday, the commission will issue a decision on whether to approve one of the spot ether ETF applications after a multi-month delay. Many are waiting to see whether the regulator will offer clarity on its stance on ether.
— CNBC’s Jordan Smith contributed to this report.
Tesla has reportedly received 50,000 orders for the new Model Y with an updated design in about 24 hours, according to a new report in China.
Last week, Tesla unveiled the mid-cycle refresh of the Model Y in China and a select few markets supplied by Tesla’s factory in Shanghai.
Deliveries are expected to start in March. The new Model Y hasn’t launched in Europe or North America yet, but it is expected to in the coming months.
The update has received mixed reviews as the updated design is not as well received as the Model 3’s recent design refresh and the specs and feature upgrades are basically in line with the Model 3 refresh.
But Tesla has reportedly received a significant number of orders for the updated electric vehicles.
According to several reports from Chinese bloggers claiming to have information coming from Tesla salespeople (via Car News China), the automaker secured 50,000 Model Y orders on the first day of the design refresh unveiling.
It’s hard to assess how significant this is for Tesla. The automaker delivered about 480,000 Model Ys in China in 2024 – up about 5% year-over-year.
50,000 units would represent just over a month of orders in a single day, but the design refresh was anticipated for about a year. Therefore, there was a lot of pent-up demand for it as people waited for the update to order.
It’s also worth noting that one of the sources claimed that Tesla is guiding that new orders being placed now won’t get delivered until April or May, which was used as evidence supporting the number of orders.
However, Tesla’s Chinese Model Y configurator is still mentioning March deliveries for new orders being placed now:
That’s true for both versions of the new Model Y. Tesla has yet to launch the updated performance version the new electric SUV.
Electrek’s Take
I wouldn’t be really surprised if Tesla secured 50,000 orders for the new Model Y in China, but I would still take this report with a grain of salt. Tesla salespeople have extremely limited visibility into sales beyond their own locations, and the sources appear to be coming from them and are relayed by Chinese bloggers on social media.
That, combined with the fact that the configurator still mentions March deliveries, makes me have doubts.
With that said, 50,000 orders is also not an unbelievable number.
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The rugged new electric SUV will be here before you know it. Jeep is fast-tracking Recon EV production as it prepares for an upcoming launch. Here’s what to expect from Jeep’s new electric SUV inspired by the legendary Wrangler.
Just as Jeep’s first global electric SUV, the Wagoneer S, is arriving at US dealers, the brand is already preparing to introduce another EV.
The Recon was revealed in 2022 as part of Jeep’s new strategy to become “the leading electrified SUV brand” in North America and Europe. Although Jeep launched the Avenger in Europe in early 2023, the Wagoneer S and Recon will be the brand’s first EV models to roll out globally.
The Recon will be Jeep’s first true off-road electric SUV. It’s built from the “ground up to be 100% Jeep 4×4.”Jeep said the new EV is for “those who love to explore extreme adventures in near silence.”
Jeep maker Stellantis said the Recon is “inspired by the legendary Wrangler.” Like the iconic off-roader, it will feature options like removable windows and doors.
With an expected launch just around the corner, Jeep (Stellantis) is reportedly fast-tracking Recon EV production.
When is Jeep launching the Recon EV?
According to MoparInsiders, a source at Stellantis’ assembly plant in Mexico claims production for the new Jeep Recon EV is set for February 24, 2025.
That’s well ahead of expected. After recently introducing the Wagoneer S and Dodge Charger Daytona to the market, Stellantis aims for a smooth launch with the new Jeep Recon EV.
Ahead of its official debut, prototypes of the rugged electric SUV have been spotted in public testing several times. A Recon EV was caught in Michigan with almost no camouflage by the folks at JeepReconForum last month. Inside, a display screen showed a range of 147 miles at 66% charge.
Although that suggests a range of around 223 miles, the production model is expected to be closer to 300 miles. Like the Wagoneer S, which features over 300 miles of driving range, the Recon EV will also be based on Stellantis’ STLA Large platform.
Jeep’s off-road electric SUV will be equipped with its signature Selec-Terrain system, which includes Rock, Mud, and other modes. It will also include standard four-wheel drive for added off-road capabilities. The Recon is expected to pack between 450 to 600 hp with dual EDMs.
According to the report, the Jeep Recon EV will launch in three trims: Willys, Overland, and an even more rugged Moab model.
We caught a glimpse of the Moab trim in 2023 after images leaked out of a dealer event. Over the past few months, the Recon EV has been spotted in public with less and less camouflage.
As it gets closer to production, Jeep’s upcoming electric SUV looks more like a Ford Bronco with a rugged exterior design.
Prices and official specs will be revealed closer to launch, but the Jeep Recon EV is expected to start at around $60,000. More expensive trims, like the Moab, could cost about $80,000. Stellantis will launch the Recon this year in the US and other global markets like Europe, The Middle East, and Asia.
What do you think of Jeep’s Wrangler-inspired Recon? Would you buy one for around $60,000? Drop us a comment below and let us know.
Source: MoparInsiders
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The world’s largest EV maker is making a big statement overseas. In a historic win, BYD officially outsold Toyota in EV sales on its own home turf for the first time last year.
BYD EV sales in Japan topped Toyota in 2024
After squeezing legacy automakers out of China with its low-cost electric cars, BYD is making a strong push into overseas markets.
BYD introduced its first electric vehicle (EV) in Japan in early 2023, the Atto 3. Starting at around $30,000, this SUV competes with popular domestic cars like the Toyota RAV4 and Honda CR-V. It also rivals other EVs on the market, like the Toyota bZ4X and Nissan Ariya.
In its first full sales year, BYD has already outsold Toyota in EV sales in Japan. This accomplishment is even more impressive since Toyota has historically dominated sales in its home market.
According to the Japan Automobile Dealer Association (via CarNewsChina), BYD sold 2,223 EVs in 2024. In comparison, Toyota sold just 2,038 electric cars in its home market last year.
BYD’s EV sales were up 54% compared to 2023, while Toyota’s slipped 30% year over year (YOY). Since launching in 2023, BYD has introduced several top-selling models, including the Dolphin hatchback and Seal sedan.
Starting at just 2.99 million yen ($19,000), the Dolphin competes with top-selling domestic cars like the Toyota Prius and Nissan LEAF.
After launching the Seal last June, widely viewed as its answer to the Tesla Model 3, BYD’s electric sedan was already the top-selling imported EV in Japan by August. BYD’s Seal starts at 5.28 million yen, or around $33,500.
BYD is turning up the pressure in 2025 with plans to launch the Sealion 07 in Japan, its new smart mid-size electric SUV.
Japan’s total EV sales fell 33% to just below 60,000 in 2024, its first YOY decline in four years. Nissan led the market with a roughly 50% share despite LEAF sales slipping nearly 50% (30,749) from 2023. Although Toyota bZ4X sales were up 10%, only 1,012 models were sold in 2024. Toyota’s electric SUV starts at 5.5 million yen ($35,000).
Electrek’s Take
After losing significant market share in China, a critical market for Japanese automakers, BYD is now taking their home market by storm.
Although it’s still a small number, BYD’s growing presence in Japan is impressive. Japan has been a challenging market for foreign brands to compete in. Outside of luxury automakers like Mercedes-Benz, Porsche, and BWM, domestic brands have historically dominated auto sales in Japan.
Toyota accounted for over a third of the market alone last year. After topping Nissan and Honda for the first time in global vehicle sales last year, BYD is laying the groundwork for more growth in 2025.
The Chinese EV leader is expanding with new models launching in Europe, Southeast Asia, Central and South America, and more. Will BYD eventually top Toyota in global sales? As the industry shifts to EVs, BYD is quickly gaining momentum while Toyota lags in key markets.
Source: CarNewsChina, JAMA
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