The US Securities and Exchange Commission (SEC) served a Pits warning for Uniswap, a leading decentralized exchange (DEX). This pre-enforcement notice, a precursor to possible legal action, triggered a crash in Uniswap’s native token, UNI.
At the time of writing, UNI is trading at $9.37, drop of 16.2% in the last 24 hours, data from Coingecko shows. The crypto has also suffered a 15% loss in the last seven days.
Uniswap whales seek safer shores
News of the SEC’s impending action acted as a fire alarm for Uniswap’s biggest investors. On-chain data analysts at Lookonchain reported significant market movements, with three major whales losing a staggering 2.03 million UNI tokens – a cool $20 million disappearing from the Uniswap ecosystem in just a few hours.
The wallets unloaded a combined total of 1.25 million UNI, potentially profiting $3.5 million if sold at current market prices. Interestingly, these tokens originated from a transfer from Binance in March 2023, suggesting a potential strategy of holding the exchange until regulatory clouds clear.
UNI takes a dip in the last 24 hours. Source: Coingecko
Another whale liquidated over 472,000 UNI for a quick payment of $4.6 million in USDC, making an incredible profit of $1.67 million. The liquidation was not limited to these three giants – six other whale-sized wallets collectively moved 316,400 UNI tokens to Binance, valued at around $3.15 million. This mass exodus of heavyweight investors has exacerbated the downward spiral in UNI’s price, leaving retail investors scrambling to assess the situation.
whitzardflow.eth was liquidated 107,010 $UNI($1 million) 1 hour ago.
He bought 262,045 $UNI($3 million) from March 1st to March 13th for $11.42 and deposited in #Aavethen borrowed $1.8 million in stablecoins.
Due to the decrease $UNI price, he was settled 107,010 $UNI($1 million) to pay off the debt and… pic.twitter.com/6mRg8sL3YE
– Lookonchain (@lookonchain) April 11, 2024
Uniswap founder vows to fight, future of DeFi uncertain
Uniswap founder Hayden Adams reacted quickly and fiercely to the SEC’s move. In a fiery statement published on Platform X, Adams condemned the SEC’s approach, accusing it of prioritizing opaque, legacy financial systems over the interests of consumers.
Today @Uniswap Labs received a warning from Wells from the SEC.
I’m not surprised. Just angry, disappointed and ready to fight.
I am confident that the products we offer are legal and that our work is on the right side of history. But it has been clear for some time that, rather than…
— hayden.eth 🦄 (@haydenzadams) April 10, 2024
He emphasized the need to defend Uniswap and the DeFi industry in general, highlighting the potential of decentralized finance to revolutionize financial inclusion.
The Wells Notice marks the beginning of what could be a long and arduous legal battle. Adams acknowledged the possibility of a fight lasting years, highlighting the immense risks involved.
The outcome of this confrontation, he argued, could significantly impact the future trajectory of DeFi and the entire cryptocurrency landscape.
UNI market cap currently at $5.6 billion. Chart: TradingView.com
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Crypto Market Prepares for Regulatory Storm
Investors now face the specter of increased regulatory scrutiny for DEXs, a sector that has thrived due to their unauthorized nature. The uncertainty surrounding Uniswap’s legal status has cast a shadow over investor confidence, raising concerns about the potential devaluation of its holdings.
Featured image from Knowledge at Wharton – University of Pennsylvania, chart from TradingView
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