SEC Probe: Uniswap Sees Biggest Loss in Months With $20M Dump

Uniswap Labs, a U.S.-based blockchain project developing the leading decentralized exchange (DEX) Uniswap, recently announced that it received a Wells notice from the United States Securities and Exchange Commission (SEC), a step towards impending enforcement actions against the DEX.

News of the sudden legal action has sparked some whales to dump their UNI tokens, causing a ripple effect on UNI’s trading price.

Uniswap Labs vs. SEC

Uniswap Labs’ announcement did not reveal the charges for which the SEC holds it accountable. Still, the project suggests that the probe is focused on the allegation that Uniswap’s native token is a security token. Securities are assets that must be registered with the SEC before being offered to investors. Over the years, the SEC has argued that most cryptocurrencies are securities.

Launched in 2018 by its founder and CEO Hayden Adams, Uniswap emerged as the leading DEX built on the Ethereum network. The exchange has expanded its tentacles to 15 more blockchain networks. Current data shows that the project has a total value locked (TVL) of over $6.1 billion.

Referencing previous and ongoing legal battles between the SEC and other crypto-based platforms, Uniswap’s chief legal officer Marvin Ammori stressed that the financial watchdog’s latest action is “particularly weak.” He explained that several judges have ruled in favor of crypto-affiliated projects like Ripple and Grayscale.

In his final tweet, Ammori expressed confidence in winning the SEC in court, stating that Uniswap’s products comply with the country’s laws. He added that the SEC’s latest move is a “continued abuse of power.”

Whales Dump UNI, Sparks Price Drop

On-chain data revealed that three whales dumped over 2 million UNI tokens worth approximately $20 million after the news broke. The crypto whales cashed in a total profit of around $5.17 million from the sale. Additionally, six wallets deposited $3.16 million worth of UNI tokens on the crypto exchange Binance.

UNI immediately took the hit, with its price tanking by over 19%. The token is trading at $9 at press time.

Source: CoinStats