Uniswap, which has always been "protected" by US courts, is involved in another lawsuit. Can it win the SEC this time?

On April 11, according to fortune, the U.S. Securities and Exchange Commission (SEC) issued a warning to Uniswap Labs on Wednesday, planning to take enforcement action against the company. It is reported that the warning was issued in the form of a "Wells Notice", which the U.S. Securities and Exchange Commission will send to a company before initiating a formal lawsuit, providing the company with a last chance to refute any allegations. At present, it is unclear what the specific nature of the SEC's allegations against Uniswap Labs is.

The market reacted very sensitively to the news. According to market data, affected by the news of "SEC warning", the price of UNI fell from $14 to the current $9.58, a 24-hour plunge of more than 14%. During this period, the on-chain transaction volume of UNI tokens surged, even rushing to 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 a warning from the SEC and published an open letter in response. In the letter, Hayden mentioned that the team believed that the products they provided were legal, and accused the SEC of not being committed to formulating clear and informed rules, but instead choosing to focus on attacking high-quality participants in the crypto field such as Uniswap and Coinbase, while letting bad guys like FTX "slip away."

In addition, Hayden specifically emphasized in the letter that Uniswap is an Internet company located in the United States to demonstrate its long-term adherence to a compliant development path. At the same time, Hayden also mentioned that this fight with the SEC will last for several years and is ready to appeal to the Supreme Court.

Related reading: "If someone is needed to promote crypto compliance, we are the best candidate" - Open letter from the founder of Uniswap

Interestingly, although the open letter revealed to the market the will of the Uniswap team to unite and fight to the end, it seems that some internal capital does not think so. On April 10, the day before the SEC issued a warning, according to @ai_9684xtpa, the Uniswap team/early investor-related wallets sold 15,000 UNIs on the chain at an average price of $11.18, about $167,000. Although the amount is insignificant, at the critical moment when the team encounters a major crisis, any details will be infinitely magnified by the market.

In the past few months, Uniswap's development momentum has gradually improved. Earlier on February 23, the Uniswap Foundation issued a statement that the Snapshot vote for the "Activate Uniswap Protocol Governance" proposal will be released on March 1. The proposal will distribute any protocol fees in proportion to UNI token holders who have pledged and delegated their voting rights. As soon as the news came out, the price of UNI tokens skyrocketed, rising from $7 to a high of around $12 overnight.

Related reading: " What happens if Uniswap turns on the fee switch? "

Immediately afterwards, on March 12, Uniswap successfully launched a non-custodial, zero-cost limit order function on the web app. On April 7, Uniswap announced that the web version had been launched on UniswapX, providing users with MEV protection, no Gas transactions, and no cost functions for failed transactions. Everything seems to be moving in a future-oriented direction. No one would have thought that the SEC would choose Uniswap as its next target of attack after losing battles with giants such as BlackRock and Coinbase.

Related reading: "UniswapX is now available. Can it really be traded with zero gas?" "

After the Tornado Cash case, the Uniswap team has always paid great attention to its compliance issues. BlockBeats previously reported that Uniswap has taken a fully compliant approach in team operations: all American executives, employee recruitment and welfare policies that fully comply with US laws, and a legal approach to the separation of open source protocols and development entities.

BlockBeats previously reported that after the SEC called HEX an unregistered security in its lawsuit against Richard Schueler and his project Hex in August 2023, Uniswap immediately removed its token HEX from the Uniswap trading interface, and was even nicknamed "centralized decentralized financial protocol" by netizens.

Related reading: "Uniswap, the most successful US Internet Fintech company under Web3 dividends"

In fact, for a long time, Uniswap has also been well protected from legal risks because of this compliance route. It can be said that the US court's attitude towards Uniswap has always been "partial". In a class action lawsuit in April 2023, the judge of the United States District Court for the Southern District of New York also dismissed the charges against Uniswap. In this case, court documents from the United States District Court for the Southern District of New York showed that the Uniswap platform was capable and in many cases legally operated, and there was no transaction between the plaintiff and the Uniswap platform and protocol. The current securities law does not seem to cover the liability of the DeFi protocol itself for using it to defraud others.

The judge believed that the plaintiffs were harmed by fraudulent token issuers who used Uniswap's core contracts and relays to scramble for funds, while Uniswap only played the role of building a platform. At least according to US securities law, this does not mean that Uniswap is responsible for the fraud and the resulting damages. Hayden, the founder of Uniswap, called the ruling "a huge victory for Uniswap and crypto compliance."

Related reading: " The US court's "friendly ruling" on Uniswap, what does it mean for DeFi regulation? "

Compared with the outcome of Tornado Cash protocol being blacklisted and the development team being arrested, Uniswap is indeed a "lucky guy" in crypto regulation. In 2024, when the crypto industry is showing a strong upward trend, Gary Gansler once again chose to be an enemy of industry giants, and the resistance is indeed not small. Although the SEC warning came very suddenly, it is foreseeable that Uniswap is also very likely to not be at a disadvantage in this future confrontation.

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