The US court has always been a "haven" for Uniswap. Will it win against the SEC this time?

On April 11, according to Fortune, the U.S. Securities and Exchange Commission (SEC) issued a warning to Uniswap Labs, planning to take enforcement action against the company. The warning was issued in the form of a "Wells Notice," which is sent by the SEC to a company before initiating formal litigation, providing the company with a final opportunity to refute any charges. Currently, it is unclear what specific allegations the SEC has made against Uniswap Labs.

The market reacted very sensitively to this news. According to market data, influenced by the "SEC warning," the price of UNI plummeted from $14 to the current $9.58, a sharp drop of over 14% in 24 hours. During this period, the on-chain trading volume of UNI tokens surged, even reaching the top of the Dexscreener Ethereum token hot list.

Uniswap responded promptly. Uniswap founder Hayden Adams confirmed on social media that Uniswap Labs had received the SEC warning and issued a public letter in response. In the letter, Hayden mentioned that the team believes their product is legal and accused the SEC of not focusing on developing clear, informed rules but choosing to target high-quality participants in the crypto space like Uniswap and Coinbase, while letting bad actors like FTX "slip away."

Furthermore, Hayden emphasized in the letter that Uniswap, as a U.S.-based internet company, has been committed to a compliant development path for the long term. Hayden also mentioned that the battle with the SEC will continue for several years and they are prepared to appeal to the Supreme Court.

Interesting to note, despite the public letter revealing the unity and determination of the Uniswap team, some internal capital seems to think otherwise. On April 10, the day before the SEC issued the warning, according to @ai_9684xtpa monitoring, wallets associated with the Uniswap team/early investors sold 15,000 UNI tokens at an average price of $11.18 on-chain, totaling around $167,000. Although the amount is insignificant, any details will be greatly magnified by the market at a critical moment for the team.

In recent months, Uniswap's development momentum has been gaining traction. On February 23, the Uniswap Foundation announced that the Snapshot vote for the "Activate Uniswap Protocol Governance" proposal would be released on March 1. This proposal would allocate protocol fees proportionally to UNI token holders who have staked and delegated their voting rights. Upon this news, the price of the UNI token surged overnight from $7 to a high near $12.

Following this, on March 12, Uniswap successfully launched non-custodial, zero-cost limit order functionality on the web app. On April 7, Uniswap announced the launch of UniswapX on the web version, providing users with MEV protection, gas-free transactions, and zero-cost for failed transactions. Everything seemed to be moving towards a future full of promise, and no one would have expected that after facing off against giants like Beladex and Coinbase, the SEC would choose Uniswap as its next target.

After the Tornado Cash incident, the Uniswap team has been very focused on their compliance issues. BlockBeats previously reported that Uniswap has taken a completely compliant route in team operations: all-American executives, recruitment policies and benefits fully compliant with U.S. law, and a legal route that separates open-source protocols from development entities.

BlockBeats previously reported that in August 2023, following the SEC's lawsuit against Richard Schueler and his project Hex, labeling HEX as an unregistered security, Uniswap immediately removed the HEX token from the Uniswap trading interface, leading to jokes about it being a "centralized decentralized financial protocol."

Actually, for a long time, Uniswap has received good protection in terms of legal risks due to this compliance route, and it can be said that the U.S. courts have been "favorable" towards Uniswap. In a collective lawsuit in April 2023, the U.S. Southern District Court of New York even dismissed the charges against Uniswap. The court documents in that case indicated that the Uniswap platform is capable and often operates legally, and there is seemingly no liability for fraud committed using DeFi protocols under current securities laws.

The judge believed that the plaintiffs were harmed by fraudulent token issuers who used Uniswap's core contracts and relays for front-running, and Uniswap only played the role of a platform builder, which, at least under U.S. securities law, does not imply responsibility for fraud and the resulting damages. Uniswap founder Hayden called this ruling a "huge victory for Uniswap and crypto compliance."

Following the Tornado Cash protocol being blacklisted and the development team being arrested, Uniswap can indeed be considered a "lucky one" in crypto regulation. In the strong upward trend of the crypto industry in 2024, Gary Gansler once again chose to confront industry giants, facing significant resistance. Although the SEC warning came suddenly, it can be foreseen that Uniswap also has a high probability of not being at a disadvantage in this future confrontation.

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