Uniswap Labs Rakes in $165M in Series B as Valuation Hits $1.66B

Uniswap Labs has landed the sum of $165 million in Series B funding as it looks to focus on the release of new products.

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According to the protocol’s founder, Hayden Adams, the funding round was led by  Polychain Capital and with participation from longtime investors a16z crypto, Paradigm, SV Angel, and Variant.

 

With the funding, Uniswap has now further extended its position as a crypto unicorn, signaling a massive shift from a protocol that was created as an experiment back in 2018 to one that is very critical in the transfer and exchange of value in the digital currency world. With the latest funding round, Uniswap has increased its valuation to $1.66 billion.

According to Hayden, the Uniswap vision is expanding and the funding will be used to accelerate growth across various verticals. He noted that the iconic Decentralized Exchange (DEX) engine is pushing to reach more users globally and to float new products including Non-Fungible Tokens (NFTs), creating a web app and developer tools, and moving into mobile amongst many other innovations already outlined.

The latest capital injection will help achieve its goals in this regard as Hayden pointed out and per the community prompting, the protocol said it has earmarked the sum of $60 million to help drive the building of new solutions by using it to support developers in its ecosystem.

The Uniswap protocol has been used to process as much as $1.2 trillion in transactions and the Uniswap V3 engine ranks as the 4th largest DEX per transaction volume according to data from CoinMarketCap.

Many protocols have been restrategizing their business models with new funding and management reshuffle. Earlier this week, competing DEX platform, dYdX appointed Charles d’Haussy from ConsenSys to help lead its Foundation as it also seeks new growth potentials across several markets.

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Uniswap Labs Unveils New Venture Capital Unit Focused on Web3 Projects

Uniswap Labs, the largest decentralized trading and automated market-making protocol on Ethereum, announced on Monday that it has launched a new venture unit- the Uniswap Labs Ventures, to invest in projects across Web3. 

The firm said that Uniswap Labs Ventures would invest in various web3 initiatives, focusing on startups developing consumer-facing apps, developer tools, and blockchain infrastructure. 

It added that it has tapped Matteo Leibowitz, Strategy Lead at Uniswap, to head up the venture arm alongside Uniswap’s Chief Operating Officer, Mary-Catherine Lader.

Leibowitz talked about the new development and said that investments from the new venture unit will be made directly from the Uniswap Labs balance sheet. He, however, did not highlight any details on how large such checks would be or how much balance sheet capital will be dedicated to the fund.

Uniswap Labs Ventures will focus on helping web3 startups to build and scale across strategy, product, design, partnerships, and engineering. The company mentioned that the venture fund will also actively participate in on and off-chain governance of projects. Uniswap Labs Ventures plans to participate in the governance systems of the Aave, Compound, MakerDAO, and Ethereum Name Service protocols. The venture fund will also invest in both equity and token deals.

Leibowitz explained how the company will invest in the project. He stated that the firm will put a lot of emphasis on the persistence and vision of the founders when giving out funds to potential startups.

Before Uniswap Labs launched its venture arm, the company has invested in 11 startups and projects, including DeFi credit markets such as MakerDAO, Aave, Compound Protocol, PartyDAO, and LayerZero as well as Tenderly, an Ethereum developer platform.

Leibowitz admitted that the broader trend of web3 firms making venture investments has shown the desire for collaboration instead of competing with one another. “The growth of Web3 companies supporting each other through venture investments reflects the principles of collaboration that are so fundamental to the industry’s open-source ethos. The Uniswap ecosystem has benefited enormously from third-party contributions, and we’re excited to pay it forward by sharing our experience and expertise with our peers,” he stated.

Uniswap has therefore joined a rising number of crypto-native firms that are now formally committing resources to invest in other firms in the space, including the likes of DeFi protocol Cake and crypto exchange FTX, which both recently unveiled their venture funds.

Providing Decentralized Finance Services

Uniswap is regarded as the largest decentralized exchange (DEX) operating on the Ethereum blockchain. The platform has been helping to lead the decentralized finance (DeFi) movement and has demonstrated itself as a champion for the democratization and decentralization of traditional financial systems.

In September last year, the U.S. Securities and Exchange Commission (SEC) started investigating Uniswap Labs with regards to how investors use Uniswap — the world’s largest decentralized exchange — and how the platform is marketed.

Uniswap responded by stating that it was committed to complying with the laws and regulations governing its industry and to providing information to regulators that would help them with any investigations.

SEC’s probe into Uniswap Labs came amid intensified regulatory interest in crypto and the digital asset market. In August, SEC Chairman Gary Gensler called on Congress to give the agency more authority to oversee DeFi platforms, which are not regulated in the U.S.

 

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DeFi Exchange Developer Uniswap Labs Under Investigations by The US SEC

The US Securities and Exchange Commission (SEC) is reportedly investigating Uniswap Labs, the development firm behind the largest decentralised cryptocurrency exchange (DEX), Uniswap. 

 

According to The Wall Street Journal media outlets, enforcement attorneys working at the agency are carrying out a civil investigation into Uniswap Labs, seeking information on how investors use the trading platform and how the team behind it markets the platform.

The SEC declined to comment on that matter, stating that the regulator does not confirm or deny investigations reports.

However, a spokesperson from Uniswap Labs talked about the development and said that the firm 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 still in its early stages. It, therefore, may not produce any formal allegations of wrongdoing, but the move comes when the SEC is keen on understanding what is happening on DeFi projects.

Meanwhile, Gabriel Shapiro, General Counsel for Delphi Labs, shed more light concerning the forces behind the emerging civil actions towards DeFi platforms. Shapiro stated that crypto-focused lawyers had been eagerly waiting to make an entry on DeFi enforcements.

“Lawyers in the space have been aware and talking for about a month about how DeFi projects are starting to get letters from the SEC, inquiries from other regulators, and this is just it is becoming more public,” he said.

Besides probes into Uniswap’s conduct, SEC’s enforcement division recently sent letters to several firms as part of an effort to examine cryptocurrency lending services, The Wall Street Journal mentioned.

A blockchain-focused lawyer with Harter Secrest & Emery LLP, Sarah Brennan, stated that the new development could indicate the being part of SEC’s more comprehensive commitment to drive a new era of DeFi enforcement.

“My feeling is this is part of a broad sweep, similar to what happened with ICOs in 2018,” said Brennan.

Heightened Regulation for DeFi Space

The new development signals that the SEC’s recent talk on DeFi is translating into action – and that a new era of enforcement is beginning to take shape.

Early last month, SEC chairman Gary Gensler called cryptocurrency markets rife with abuse, cams, and fraud. The chair called on Congress to provide the commission with more powers to regulate cryptocurrency markets. 

On August 6, the SEC filed charges against the first DeFi technology firm, Blockchain Credit Partners and its founders Gregory Keough and Derek Acree, for selling more than $30 million of unregistered securities in the form of two digital tokens were offered through smart contracts on the Ethereum blockchain.  

On August 19, Gensler announced that DeFi projects are not immune to regulations, stating that DeFi projects have features that make them look like the type of firms regulated by the SEC. The SEC chairman said that DeFi projects and crypto platforms lack adequate protections and therefore could violate the US securities laws as well as commodities and banking laws.

Late last month, the SEC announced that it would monitor decentralised finance transactions after contracting with the Blockchain cybersecurity company AnChain.AI. With the contract in place, the SEC is now able to identify suspicious addresses and transactions and examine the DeFi space.

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