Uniswap Labs, the creator of the Uniswap decentralized exchange protocol and issuer of the UNI token, received a Wells notice from the SEC which indicates an investigation has been conducted on them and legal action may be taken. The SEC has been investigating Uniswap since last summer, but Uniswap Labs has vowed to fight back against the accusations. Uniswap Labs argues that the Uniswap Protocol is decentralized and does not fall under the SEC’s jurisdiction as a securities exchange.
The SEC’s focus on Uniswap and other cryptocurrency companies such as Coinbase has raised concerns among industry figures who believe that the SEC may be targeting legitimate players while allowing bad actors to slip by. Uniswap Labs’ Chief Legal Officer Marvin Ammori accused the SEC of abusing its power and cited past instances where judges have ruled against the SEC for acting arbitrarily and capriciously. In the case of Ripple, a judge ruled that the SEC didn’t act in faithful allegiance to the law.
Uniswap’s founder, hayden.eth, argues that the SEC’s claims against Uniswap Labs are weak and that the SEC only has authority over securities, not any asset represented by a specific file format. He also pointed out that the SEC’s recent case against Coinbase regarding crypto wallets did not hold up in court. Despite the confidence and resolve shown by Uniswap Labs in fighting the SEC, UNI traders are uncertain about the future of the token. Following the Wells notice, the Uni price dropped by 11% and is now below $10.
Investors are closely watching UNI’s price movements as it probes support levels around $9.80. A break below this level could lead to further losses for the token. However, some investors see this as an opportunity to take positions in UNI, considering Uniswap’s status as a leading multi-chain DEX protocol with $2 trillion in lifetime volumes. The outcome of the SEC’s lawsuit against Uniswap Labs will be closely monitored by the cryptocurrency community as it could have implications for the industry as a whole. Despite the challenges ahead, Uniswap remains determined to defend its protocol and reputation.
