The SEC, the United States securities regulatory body, has given Uniswap, a popular decentralized exchange (DEX), a warning signaling possible future legal proceedings. This notice, known as a Wells Notice, caused a significant drop in the value of Uniswap’s native token, UNI.
Currently, UNI is priced at $9.37 on the market. In the past 24 hours, its value has decreased by 16.2%. According to Coingecko, this cryptocurrency has experienced a 15% decrease in value over the last week.
Uniswap Whales Seek Safer Shores
The news of the SEC’s looming action acted as a fire alarm for Uniswap’s biggest investors. On-chain data analysts at Lookonchain reported significant market movements, with three large whales shedding a staggering 2.03 million UNI tokens – a cool $20 million vanishing from the Uniswap ecosystem within hours.
Approximately 1.25 million UNI tokens were transferred out of digital wallets, which could generate around $3.5 million in profits if sold at present market values. Notably, these tokens stemmed from a Binance transaction carried out in March 2023, suggesting a possible approach to wait on the exchange until regulatory uncertainties subsided before making any moves.
A large investor sold off over 472,000 UNI tokens for approximately $4.6 million in USDC, pocketing a gain of around $1.67 million. This wasn’t an isolated event; six other substantial wallets transferred 316,400 UNI tokens to Binance, equating to around $3.15 million. The sudden departure of these major investors intensified the price drop of UNI, causing uncertainty among smaller investors.
whitzardflow.eth was liquidated 107,010 $UNI($1M) 1 hour ago.
From March 1st to March 13th, he purchased a total of $262,045 worth of UNI for approximately $3 million each, at an average price of $11.42. Afterward, he transferred this amount into Aave. Subsequently, he borrowed a sum of around $1.8 million in stablecoins using the deposited UNI as collateral.
Due to the decrease in $UNI price, he was liquidated 107,010 $UNI($1M) to repay the debt and…
— Lookonchain (@lookonchain) April 11, 2024
Uniswap Founder Vows To Fight, DeFi Future Uncertain
Hayden Adams, founder of Uniswap, quickly and strongly responded to the SEC’s action through a passionate post on the X platform. In this statement, he criticized the SEC for favoring complex, traditional financial structures over consumer needs.
Today @Uniswap Labs received a Wells notice from the SEC.
I’m not surprised. Just annoyed, disappointed, and ready to fight.
We’re certain that the items we provide comply with the law, and our actions align with historical precedents. However, it’s become evident over time that instead of… (You can complete the sentence with your intended meaning)
— hayden.eth (@haydenzadams) April 10, 2024
He strongly advocated for protecting Uniswap and the wider Decentralized Finance (DeFi) sector, highlighting its capacity to transform financial accessibility through decentralization.
A Wells Notice signifies the initiation of a potentially lengthy and challenging legal dispute. Adams conceded that this could entail a years-long struggle, emphasizing the significant implications at play.
In other words, he believed that the result of this collision would greatly influence the direction of DeFi and the broader cryptocurrency world in the coming days or weeks.
Related Reading: From Hat To Heights: Dogwifhat’s $17 Crypto Leap Electrifies Investors
Crypto Market Braces For Regulatory Storm
Investors are facing growing concerns about heightened regulatory oversight for Decentralized Exchanges (DEXs), which have flourished due to their permissionless characteristics. The question mark hanging over Uniswap’s legal standing has dampened investor trust, leading some to worry about potential losses in their investments.
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2024-04-11 11:46