Uniswap price tanks 10% as team vows to fight SEC threat

The price of UNI, the token representing Decentralized Exchange Uniswap, dropped to its lowest point in over five weeks. This happened after Uniswap disclosed receiving a proposed lawsuit notice from US regulatory authorities. They are prepared to defend against this legal action.

UNISwap’s announcement that they received a Wells notice from the SEC caused UNI to decrease by 10%, from $11.21 to $10, within an hour.

According to CryptoMoon Markets Pro, the current UNI price is at $9.66, which is its lowest since late February. (Or) The price of UNI on the market is now $9.66, marking a new low not seen since late February based on CryptoMoon Markets Pro’s data.

“I’m not shocked, but rather frustrated and displeased,” Hayden Adams, the founder of Uniswap Labs based in New York, expressed in a recent post on X. “This dispute is likely to last for years and could potentially reach the Supreme Court.”

In a blog entry about the Wells notice, Uniswap didn’t disclose the specific details, but asserted that the UNI token isn’t considered a security under U.S. law and doesn’t fall under the categories of a securities exchange or broker.

A representative from the Securities and Exchange Commission (SEC) declined to confirm or deny to CryptoMoon the presence of any ongoing investigation.

Bill Hughes, senior counsel and regulatory director at ConsenSys, explained in a post on X that before the SEC can file a lawsuit, it must obtain the approval of its five commissioners, including chair Gary Gensler.

“It’s common knowledge that the Chair intends to file a lawsuit against them. Two commissioners are in agreement with this decision, while two others disagree. A lawsuit is inevitable, but one has not been initiated as of now.”

For those feeling anxious, take a moment to breathe deeply and remain calm. It’s highly unlikely that the SEC will go after UNI token holders or protocol users.

Previously serving as the head of internet enforcement at the Securities and Exchange Commission (SEC), John Reed Stark stated that a Wells notice allows the recipient to make a case for why the SEC commissioners should reconsider their decision to file a lawsuit.

He found the Uniswap’s reaction to the SEC notice “predictable” and is “often taken aback” when SEC noticees respond by launching provocative PR campaigns, which Uniswap appears to have initiated.

“Any SEC lawyer will agree that responding to a Wells by berating the SEC, calling them names, etc. is a weak, risky and losing strategy.”

Stark accused Uniswap of repeating a worn-out and weak argument by implying that the SEC was misusing its authority and criticizing the SEC’s supposedly inhibitive enforcement approach.

He predicted that the SEC Enforcement team would likely file a detailed and strong federal lawsuit, which is unlikely to be dismissed at the initial stage, succeed in most summary judgment proceedings, and prevail in almost all contested issues that arise afterwards.

In a post on X, Gabriel Shapiro, who used to work as the legal counsel for Delphi Labs, expressed his belief that the Securities and Exchange Commission (SEC) is likely to prevail in its case against UNI regarding securities matters. However, if the SEC attempts to classify Uniswap as a securities exchange, Shapiro suspects they may lose the argument.

Paul Grewal, Coinbase’s chief legal officer who is involved in a lawsuit with the SEC, shares Shapiro’s viewpoint. If the SEC insists that Uniswap functions as a broker, Paul believes that argument would be difficult for them to sustain.

Last month, a judge ruled in the SEC’s case against Coinbase that the SEC had not provided sufficient evidence to claim that Coinbase engaged in brokerage activities using their decentralized Coinbase Wallet.

2024-04-11 04:36

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