The price of Uniswap's UNI token fell sharply following news that the decentralized exchange was in the crosshairs of the Securities and Exchange Commission.
CoinGecko data shows that UNI has dropped by 9% within an hour and is now trading for $10.15. At one point the price dipped below $10 for the first time since late February, and over the past 24 hours, the drop is closer to 11%.
The token is the 20th biggest digital asset, with a market cap of $7.6 billion. Those who hold enough of the tokens, which run on Ethereum, can vote for proposed changes to the protocol.
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Uniswap is a platform allowing people to trade cryptocurrencies. Unlike centralized exchanges like Coinbase, it's a decentralized exchange—it allows anyone with an internet connection to swap tokens.
And Uniswap Labs, the firm behind the platform, said today that it received a Wells notice from the Securities and Exchange Commission.
Today @Uniswap Labs received a Wells notice from the SEC.
I’m not surprised. Just annoyed, disappointed, and ready to fight.
I am confident that the products we offer are legal and that our work is on the right side of history. But it’s been clear for a while that rather than…
A Wells notice is when the top regulator informs a company or individual that it intends to take enforcement action.
The SEC has gone after a number of crypto companies for allegedly selling unregistered securities, and has been investigating Uniswap for years. But its track record in enforcement actions is uneven, with the company's chief legal officer Marvin Ammori pointing out examples of recent overreach by the federal regulator.
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2/ In Ripple, a judge ruled didn’t act “out of a faithful allegiance to the law”
In Grayscale, three judges ruled broke the law in denying a bitcoin ETF, having no “reasonable and coherent” explanation
In our case with @Uniswap, the SEC’s arguments are particularly weak
