Uniswap has maintained that the UNI token is not a security and added that it does not meet the legal definition of any type of security.
UNI whales appear to be in distress as they engage in offloading tokens after Uniswap revealed receiving a notice from the US Securities and Exchange Commission (SEC) that it plans to pursue an enforcement action.
Following the development, UNI’s price tumbled to $9.27, extending its monthly losses to over 35%.
UNI Whales Sell Tokens
The news triggered a significant sell-off in UNI, as three major whales sold around 2.03 million tokens, which are approximately worth $20 million. This further caused a steep 17% decline in UNI’s price over the past day, dragging the crypto asset to its lowest point in two months.
Among these whales, addresses 0x2F8b and 0x3555 swiftly deposited 1.25 million UNI, worth $11.7 million, received from Binance onto the exchange, potentially to make a profit of around $3.5 million if they choose to sell, according to Lookonchain’s latest findings.
Additionally, address 0x4A0B liquidated 472,691 UNI tokens for $4.59 million USDC at $9.71 per UNI, raking in a profit of $1.67 million. Furthermore, six wallets collectively deposited 316,430 UNI tokens, valued at $3.16 million, onto Binance.
The whale-driven sell-off comes on the heels of the SEC’s issuance of a Wells Notice against Uniswap Labs, the company behind the world’s largest decentralized exchange.
The exact motive behind the SEC’s notice regarding Uniswap has not been disclosed yet, but it appears to align with the regulator’s broader initiative to extend securities regulations to US companies operating in the digital asset space, such as Coinbase and Binance.
In its official statement, Uniswap asserted that its protocol, web application, and associated wallet infrastructure do not fall under the legal definitions of securities exchange or broker. This stance was reinforced in the SEC vs. Coinbase ruling, where the court promptly dismissed the agency’s claim that cryptocurrency wallets could be classified as brokers, even if they levy fees.
Uniswap also highlighted that the UNI token itself does not qualify as a security, citing that it does not satisfy the legal criteria for any category of security, including the definition of an “investment contract.”
Unswap Founder Ready to Fight
Uniswap founder Hayden Adams said that he is “annoyed” and “disappointed” but is ready to fight. While taking a jibe at the SEC, Adams also said that Uniswap does a “far better job” in fulfilling the mission of “protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation” compared to the regulatory body itself.
Expressing frustration with what he perceives as the SEC’s prioritization of opaque systems over consumer protection, the founder declared his readiness to defend not just Uniswap but also the decentralized finance (DeFi) industry against governmental intervention, even if it means engaging in a lengthy legal battle that could potentially reach the Supreme Court.