In a tumultuous turn of events, Uniswap’s native token UNI has taken a sharp nosedive, plummeting by 16% in response to news of an impending lawsuit from US regulators. The token, which had been trading steadily, saw a dramatic drop to $9.27, marking its lowest point since late February.
The market cap of UNI also took a hit, witnessing a staggering 17% loss in the hours following the announcement, with trading volumes reaching $5.54 million, as reported by CoinMarketCap.
Founder of Uniswap Labs, Hayden Adams, expressed frustration and a firm stance against the Securities and Exchange Commission (SEC), indicating preparedness for a legal battle that could escalate to the Supreme Court.
Uniswap maintains that UNI does not qualify as a security, thus positioning itself outside the regulatory purview of securities exchanges or brokers. However, details surrounding the Wells notice remain undisclosed, leaving the community speculating on the specifics of the SEC’s allegations.
Bill Hughes, Consensys’ Senior Counsel and Director of Regulatory Matters, shed light on the SEC’s procedural requirements for filing a lawsuit, emphasizing the necessity of approval from the agency’s five commissioners.
Steady lads. I'm seeing signs of some getting a bit spooked and wondering if they might be in harms way in light of the news @Uniswap just dropped. a couple of things:
1) Uniswap was just informed that the SEC staff is going to recommend to the commission that they approve a…
— Bill Hughes : wchughes.eth 🦊 (@BillHughesDC) April 10, 2024
Despite the uncertainty looming over the crypto community, Hughes urged for calm, reassuring UNI holders and users of the unlikelihood of direct targeting by the SEC.
However, former SEC internet enforcement chief John Reed Stark criticized Uniswap’s public response to the Wells notice, cautioning against aggressive tactics and emphasizing the risk involved in antagonizing regulatory authorities.
As the situation unfolds, market participants brace for further developments, with all eyes on Uniswap’s legal battle against the SEC and its potential implications for the broader crypto landscape.
