After receiving a notice from SEC Wells that the token dividend plan was shelved, can Uniswap 'spend money to avoid disaster'?

On April 11, Fortune Magazine reported that the U.S. Securities and Exchange Commission (SEC) had issued a warning to Uniswap and intended to take enforcement action against the company.

Subsequently, Uniswap founder Hayden Adams replied on social platforms that Uniswap Labs has received a formal Wells Notice from the U.S. Securities and Exchange Commission (SEC), and the U.S. SEC plans to It filed a lawsuit.

Regarding the SEC’s lawsuit, he said that Uniswap has processed more than 2 trillion US dollars in transactions, and many teams and developers have forked or developed based on its code. The product is legal and has been completed. Be prepared to fight back and will fight it to the end.

The "Wells Notice" is a reminder before the US SEC files a formal lawsuit against the target. It indicates that the regulatory agency plans to take enforcement actions against it and that it will have the opportunity to discuss certain accusations with the SEC before receiving a formal lawsuit. Carry out refutation, communication and negotiation, etc.

After the news broke, the Uniswap platform’s native token UNI plummeted, falling from $11.2 to $8.9, a short-term drop of more than 20%, and was quoted at $9.3 as of press time.

The UNI dividend plan has been pressed on the pause button

The impact of the SEC’s black swan incident is still continuing, and news of large-scale selling of UNI tokens on the chain continues . Data on the chain shows that after news of the SEC charges was issued, the Uniswap team or wallets associated with early investors sold 15,000 UNI (worth $167,000) at an average price of $11.18; a smart money address transferred over 10 million worth to Binance USD UNI token; the whale marked "whitzardflow.eth" on the chain was liquidated with more than 100,000 UNI positions (worth approximately US$1 million), etc.

The dividend plan of the UNI token may have been put on hold because of this. The on-chain voting results of the proposal "Activating Uniswap Protocol Governance" that was supposed to be released on March 8 have yet to move, some users said. , it turned out that the SEC affected the advancement of the proposal.

On February 23, the Uniswap Foundation issued a document stating that it had released a proposal to "Activate Uniswap Protocol Governance" on the governance forum, proposing that its protocol fees be proportionally distributed to UNI representatives who have pledged and entrusted their voting rights. Coin holders will start voting on Snapshot on March 1st. After the news of Uniswap’s dividend proposal came out, the price of UNI tokens skyrocketed, rising from US$7 to a maximum of around US$12 overnight.

The governance proposal was completed on March 7 and received 100% voting approval rate. The on-chain voting was originally supposed to be released on March 8, but it was not implemented as scheduled. There was no news and there was no official announcement. explain.

It wasn’t until news of the SEC lawsuit came out that users suddenly realized that it was the SEC that forced UNI’s dividend plan to be suspended.

Can Uniswap be settled with a "fine"?

In response to this SEC action, Uniswap Labs wrote in the official "Fighting for DeFi" article that Uniswap products are legal, and all existing products will always be running and available, and will continue to be launched. New product.

However, it is currently unclear the specific content and nature of the SEC’s charges against Uniswap Labs.

According to previous SEC lawsuits against well-known cryptocurrency companies such as Binance, Coinbase, and Ripple, Uniswap Labs may be labeled as "illegally providing unregistered securities to the public, or failing to register as a broker or exchange." ” and other charges.

However, the notice issued by the SEC this time is not a formal prosecution or regulatory enforcement document, leaving Uniswap with an opportunity for communication.

Last August, the Southern District Court of New York (SDNY) dismissed a class action lawsuit against Uniswap. The case is a group of investor plaintiffs accusing Uniswap and its founders of allowing fraudulent tokens to be issued and traded on the protocol, accusing them of failing to register in accordance with U.S. federal securities laws, illegally listing fraudulent tokens, causing damage to investors and demanding compensation.

Regarding this case, the judge believed that the current encryption regulatory system cannot provide a basis for the plaintiff’s claims. Uniswap is not responsible for any damage caused by third parties using the protocol, and the tokens that committed the damaging behavior should be issued Party should bear responsibility.

Although the SEC warning came very suddenly, some users believe that Uniswap will most likely not have the upper hand in this future showdown.

Some community users believe that Uniswap is likely to settle the SEC's prosecution with a fine.

Since the regulatory boots have not yet been officially launched, and the content and details of the accusations against Uniswap have not been made clear, the future is still full of uncertainty, which has once again cast a shadow on the DeFi industry that has been stagnant for a long time.

Uniswap is the leading product in the DeFi industry, and every move made by the SEC will affect the future development of other DeFi protocols.

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