The trading activity on the Uniswap decentralized exchange saw a significant drop of nearly 10% in just one day following the issuance of a Wells notice by the US Securities and Exchange Commission (SEC) to Uniswap Labs, the organization behind the platform. Data from DeFillama revealed that Uniswap had facilitated trades totaling $2.7 billion across various blockchain networks like Ethereum, Arbitrum, Coinbase-backed Base, and others. The decline in trading activity was most prominent on Uniswap V3, the most utilized version of the decentralized trading platform.
The news of the SEC action had a notable impact on the exchange’s native UNI token, which plummeted to a multi-week low of $9.09 according to CryptoSlate’s data. Following the announcement, three whales were observed dumping a total of 2.03 million UNI tokens worth $20 million on centralized exchanges. While two addresses deposited 1.25 million UNI each on Binance, another whale sold 472,691 UNI for $4.59 million USDC, making a profit of $1.67 million.
Mavin Ammori, the Chief Legal Officer at Uniswap Labs, expressed the company’s firm stance in addressing any potential lawsuit brought forth by the SEC. Ammori refuted the allegations made by the financial regulator, highlighting that the SEC’s jurisdiction is limited to securities and not assets governed by specific file formats or technical standards. He stressed that tokens like Bitcoin, ETH, stablecoins, and meme coins do not fall under the category of securities. Ammori emphasized that the Uniswap Protocol, web app, and wallet do not qualify as securities exchange or broker as per legal definitions.
Despite the challenges posed by the SEC’s actions, Uniswap Labs reiterates its support for sensible regulations in the cryptocurrency space. The company advocates for a clear rule of law rather than arbitrary enforcement and the misuse of power by regulatory authorities. Ammori emphasized the importance of defining regulations that align with the nature of digital assets while promoting innovation and growth within the industry.
The Wells notice issued by the SEC to Uniswap Labs has had a significant impact on the trading activity on the platform, as well as the value of the UNI token. The response from Uniswap Labs’ Chief Legal Officer reflects a commitment to transparency, compliance, and a willingness to engage in constructive dialogue with regulatory bodies to shape the future of decentralized finance.