Four days after Uniswap Labs and the Uniswap Foundation proposed to merge their operations and activate the long-awaited fee switch, a disagreement occurred between the protocol founder and the Uniswap Foundation. Gary Gensler The former chief of staff has reopened wounds that the cryptocurrency industry thought had healed.
The exchange wasn’t just about a vote on governance, it was a proxy war over how Washington and Web3 will remember 2022, and whether decentralization is more than just regulatory theater.
Amanda Fisher, who now works at Better Markets after serving as SEC chief of staff under Gensler, Launched first.
On November 14, it posted that Uniswap’s proposal to consolidate enterprise operations into a for-profit Labs entity while directing protocol fees to burn UNI tokens said:
“This site is full of posts about Uni becoming centralized because it was never a core philosophical value but rather an organizational shield.”
Within hours, Hayden Adams He responded:
“You tried to hand over the central monopoly of cryptocurrency exchanges in the US to FTX. You built the largest decentralized market in the world. And you say decentralization is not one of my values? This collapse is crazy. Not everything you read on Twitter is true, Amanda.”
The specter of the SBF playbook in Washington
Call Adams to FTX It was not a rhetorical flourish, but a strategic exploration. In October 2022, one month before his stock market collapsed, Sam Bankman Fried (SBF) “Potential Digital Asset Industry Standards,” a policy framework that supports the licensing of DeFi front-ends and requires OFAC sanctions screening.
The proposal sparked an immediate backlash from builders, who saw it as a capitulation disguised as a compromise.
The discussion crystallized in the Bankless episode where Eric Voorhees He accused the SBF of “glorifying OFAC” and undermining the core values of cryptocurrencies.
Bankman-Fried responded that licensing a front-end would keep out permissionless code while pleasing regulators, a distinction that critics found meaningless given that interfaces are how most users access protocols.
At the same time, the SBF has become the most prominent industry supporter of the Digital Goods Consumer Protection Act, legislation that critics have dubbed the “SBF Bill” due to its compliance obligations that would effectively ban major DeFi services.
The bill died along with the collapse of FTX, but this episode reinforced the narrative: Bankman Fried wanted regulatory control to benefit centralized exchanges, and Washington was willing to move forward.
Fisher’s tenure at the SEC overlapped with this period. While she has pushed for transparent rules for the Administrative Procedure Act, her record is unequivocally pro-implementation.
In her testimony before Congress, she said that cryptocurrencies could comply with existing securities laws. A recent analysis co-authored by Better Markets criticized the current SEC for “abandoning” its enforcement efforts.
Its philosophical compatibility with powerful regulation makes Adams’s accusation particularly fraught.
The fee switch took five years
The unification proposal represents real structural change. Since its launch UNI In 2020, Uniswap Labs They operate at a distance from management, restricted in how they participate in protocol decisions.
The toll switch has remained dormant despite repeated attempts, each of which faltered due to legal ambiguity over whether activation would turn UNI into a security.
The November 10 proposal, co-authored by Adams, foundation CEO Devin Walsh, and researcher Kenneth Ng, activates protocol fees via Uniswap v2 and v3 pools, directing the proceeds to UNI burning operations, and immediately destroying 100 million UNI from the treasury.
Labs will also stop collecting its interface fees, which generated a cumulative total of $137 million.
The merger brings together the enterprise operations of the laboratories, creating a “single aligned team” for protocol development. Critics see centralization as a disadvantage, as fewer entities mean fewer controls.
Proponents view efficiency as an advantage, as fewer entities means faster implementation. UNI rose as much as 50% following the news before settling at $7.06 as of press time.
Fisher’s reading is that decentralization was always conditional, maintained when it provided legal insulation, and abandoned when economic incentives shifted.
Adams’s reading is that the move represents maturity, whereby a protocol that has survived five years of regulatory hostility can finally link value creation and governance.
What 2022 actually looked like
The Tornado Cash sanctions in August 2022 formed the context referred to by both parties. When the Treasury Department’s Office of Foreign Assets Control approved the Mixer Protocol, it was the first time the code itself faced designation.
This action forced all DeFi creators to confront whether US users can legally interact with their protocols and whether front-ends bear liability.
The SBF Policy Memorandum was dropped two months later in exactly this atmosphere. His framework acknowledged the new reality: If regulatory bodies can impose sanctions on protocols, the battle for access becomes existential.
His answer, which included licensing interfaces, vetting users, and maintaining code without permission, shocked many because it capitulated to the throttling cryptographic model it was designed to circumvent.
The alternative position, advocated by builders like Voorhees and implicitly Adams, holds that any compromise on access controls recreates TradFi gatekeeping in Web3 clothing.
If you check the users in the front end, you have already lost the unauthorized game.
Uniswap position Important because of its size. As the largest decentralized exchange, now processing more than $150 billion a month and generating nearly $3 billion in annual fees, its compliance stance sets defaults in the industry.
Why is this important now?
The current SEC has backed away from crypto enforcement under the new administration. Fisher’s analysis of better markets clearly flawes this decline.
For implementation advocates, Uniswap’s consolidation is a victory that fades after a successful regulatory takeover.
For Adams and the DeFi community, the proposal represents an independence gained after years of hostile oversight that nearly classified UNI as a security, creating legal uncertainty so profound that toggle fees remained dormant despite the wishes of token holders.
The FTX reference goes deeper because it reframes the question of who was collaborating with whom. If the SBF’s agenda in Washington aligned with the SEC’s preferences, executive-oriented regulators served as enablers of centralization, not protectors against it.
Adams built unlicensed infrastructure; Bankman Fried pushed for licensed choke points. One of them has survived regulatory scrutiny and is now activating value sharing for token holders. The other collapsed into fraud.
Their
The $800 million token burn and 79% administration approval odds suggest that the market has already chosen its answer.
