The UNI token, associated with the decentralized exchange Uniswap, experienced a significant decline to a six-week low following news that the company had received a notice of a proposed lawsuit from US regulators. However, Uniswap stated that it is prepared to fight the lawsuit. Within an hour of the announcement, UNI dropped by 10% from $11.21 to $10. Currently, UNI is being traded at $9.66, its lowest point since late February, according to Cointelegraph Markets Pro. TradingView data confirms that this drop in price has put UNI at its lowest level in 47 days. Uniswap Labs founder Hayden Adams expressed his emotions about the situation in an X post on April 10, stating that he was annoyed, disappointed, and ready to fight. Adams also mentioned that this legal battle could take years and may even reach the Supreme Court. Although Uniswap did not disclose the exact details of the Wells notice, the company claimed in a blog post that UNI is not categorized as a security and does not meet the legal definitions of a securities exchange or broker in the US. The Securities and Exchange Commission (SEC) spokesperson declined to comment on the matter. Bill Hughes, a senior counsel and director of regulatory matters at Consensys, clarified on X that SEC staff must first obtain approval for the lawsuit from the agency’s five commissioners, including chair Gary Gensler. He also mentioned that while it is certain that a lawsuit will be filed, it has not yet been initiated. Hughes advised those who are concerned about the situation to remain calm, emphasizing that it is highly unlikely that the SEC will target UNI holders or protocol users. John Reed Stark, the former chief of internet enforcement at the SEC, explained on X that a Wells notice provides the recipient with an opportunity to argue against a recommended lawsuit. Stark expressed his lack of surprise regarding the notice to Uniswap and criticized the company for launching what he deemed an obnoxious and insulting PR campaign against the SEC. He predicted that the SEC will respond with a comprehensive federal complaint that will withstand dismissal attempts and prevail in subsequent litigated issues. Gabriel Shapiro, the former general counsel of Delphi Labs, shared his belief on X that the SEC is likely to win on securities issues related to UNI, but will lose if it claims Uniswap is a securities exchange. Paul Grewal, the legal chief of Coinbase, which is currently facing a lawsuit from the SEC, agreed with Shapiro’s perspective and stated that if the SEC argues that Uniswap is a broker, it would not be able to support its claim. Grewal cited a recent court ruling in the SEC’s case against Coinbase as evidence, which determined that the SEC had failed to provide sufficient evidence that Coinbase engaged in brokerage activity through its decentralized Coinbase Wallet.
Uniswap's value plunges by 10% amid team's commitment to combat SEC challenge.