The US Securities and Exchange Commission is launching a probe into Uniswap Labs, developer of the world’s largest decentralized exchange.

According to the Wall Street Journal, SEC enforcement attorneys are looking for information about how investors use Uniswap and how developers market it. In response, Uniswap Labs said it 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.” The investigation is only in its early stages. No formal allegations are certain.

DEX regulation

Due to the lack of a central entity, many decentralized exchanges (DEXs) say they don’t need to register with regulators. Additionally, DEXs don’t have one single authority deciding which tokens are tradable over the protocol, instead allowing their users to decide. However, the SEC now seems to be rearing its head upon the nascent DeFi environment.

Last month, SEC Chairman Gary Gensler highlighted that DeFi projects hold no exemption from regulatory scrutiny. Despite running on a distributed network without a central server, DEXs may still be controllable via developers or middlemen. These actors could benefit from incentives such as trading fees, or native tokens, which give holders governance rights.

According to Gensler, “there’s some incentive structure for those promoters and sponsors in the middle of this,” which he feels needs regulating. Gensler intimated that the SEC would focus on exchanges that facilitate the trading and creation of digital assets. This is especially the case for ones that need to be registered with the SEC.

Additionally, the enforcement division of the SEC recently sent letters to multiple startups seeking information about their crypto lending platforms. The enforcement staff solicited information regarding quarterly revenue, and company founders. They additionally queried for any analysis of the status of native tokens as securities. The SEC sent some of the letters as early as July.