Uniswap's Cryptocurrency UNI Hits Six-Week Low Amid Regulatory Notice, Braces for Legal Battle
Summary:
The cryptocurrency UNI, linked to the Uniswap decentralized exchange, dropped to a six-week low following a legal notice from US authorities indicating impending regulatory action. Despite this, Uniswap Labs anticipates a petition against the allegations. In response to the Wells notice, Uniswap maintained that their currency does not bear the characteristics of a security and asserted their readiness for an upcoming legal dispute. Experts predict a impending lawsuit, but advise calm as they believe individual UNI holders or users will not be targeted.
The cryptocurrency UNI, associated with the Uniswap decentralized exchange, plummeted to a six-week low following a legal notice from US authorities, but Uniswap is prepared to contest this. The currency took a 10% hit, diving from $11.21 to $10 in the aftermath of the announcement about receiving a Wells notice from the Securities and Exchange Commission, an alert indicating an impending regulatory action. The lowest value of UNI currently stands at $9.66, a figure not witnessed since the end of February, stated Cointelegraph Markets Pro. Data from TradingView reveals UNI has reached a 47 day low because of this plunge. Hayden Adams, the founder of the New York rooted Uniswap Labs, expressed his readiness for the upcoming dispute on an April 10 X post.
Despite the contents of the Wells notice being undisclosed, a corresponding blog post by Uniswap maintained that UNI did not bear the features of a security and did not align with the American legal definitions for a securities exchange or broker. A representative from the SEC did not offer any comments on potential investigations.
Senior counsel at Consensys, Bill Hughes, communicating on X, stated that a lawsuit proposed by the SEC staff needs to be approved by a panel of five commissioners of the agency, with Gary Gensler as the Chair. He noted that this suit is a matter of concern, even though it hasn't been initiated yet, and advised people to remain composed to the objection that SEC won't target UNI holders or users. Formerly in charge of SEC Internet Enforcement, John Reed Stark opined that a Wells notice allows the winner to argue on why the commissioners should refuse an advised lawsuit.
Stark also remarked that it was unsurprising for Uniswap to receive such a notice and the seemingly aggressive public relations approach taken up by the company was futile. He was of the view that the SEC's power misuse claims by Uniswap was a feeble and fruitless argument. He also suggested the SEC Enforcement staff would progress with a sound and comprehensive federal lawsuit.
Uniswap may lose to the SEC on securities issues with UNI but may stand victorious if Uniswap is claimed to be a securities exchange, according to Gabriel Shapiro, Former Delphi Labs general counsel. Paul Grewal, legal head of Coinbase, concurred with Shapiro's opinion and mentioned that Uniswap is unlikely to be able to authenticate its claim if it is identified as a broker. Grewal drew attention to the last month's decision of a judge in the SEC's lawsuit against Coinbase, which stated that the SEC couldn't prove Coinbase conducted brokerage activities through its decentralized platform.
Published At
4/11/2024 2:43:49 PM
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