Crypto tokens should not be classified as securities, according to Uniswap Labs, in opposition to a prospective enforcement action by the U.S. Securities and Exchange Commission (SEC).
The New York-based firm recently refuted accusations that it functioned as a broker-dealer and unregistered exchange. This follows the SEC's issuance of Uniswap Labs a Wells Notice, in which it declared its intention to recommend legal action against the company.
Uniswap Responds to SEC's Wells Notice
Multiple arguments were presented by Uniswap Labs in a 40-page SEC filing in support of a reconsideration of the agency's intended legal action. Uniswap Labs disputes the SEC's assertion that all tokens qualify as securities, which is the foundation of its claims.
The Chief Legal Officer of Uniswap Labs, Marvin Ammori, argued that tokens are merely a file format for value and not inherently securities. His critique pertained to the SEC's endeavors to expand the parameters of "exchange," "broker," and "investment contract" to encompass Uniswap's operations.
Through Wells notices, litigation, and settlements, the SEC has targeted many cryptocurrency firms this year, with a growing emphasis on Ethereum and decentralized finance (DeFi) entities, including Uniswap, ShapeShift, TradeStation, and Consensys. According to additional reports, the Ethereum Foundation is reportedly the subject of an investigation.
Securities Vs. Tokens: Key Differences
According to Uniswap Labs, the SEC's case is fundamentally defective because it fails to differentiate between tokens used as files for value and tokens used as securities.
According to Uniswap Labs, such litigation could undermine the SEC's ongoing rulemaking efforts. The organization conveyed its preparedness to engage in conflict and assurance of a positive resolution, declaring:
Gary Gensler, chairman of the SEC, has maintained an unwavering position that decentralized exchanges necessitate regulation to ensure their authenticity. Furthermore, he believes numerous digital assets qualify as unregistered securities subject to SEC regulation. Uniswap Labs, in its reply, contended that its governance token, UNI, fails to satisfy the requirements of the Howey Test, a legally recognized criterion employed to evaluate investment contracts.
Additionally, the organization challenged the SEC's categorization of LP tokens, which are utilized to provide liquidity in Uniswap pools as securities. Uniswap Labs states LP tokens are accounting instruments, not investment vehicles.
Uniswap Price (UNIUSD) Technical Analysis
In the daily chart of UNI price, the recent price trades higher from the range breakout, supported by the solid fundamental factor.
After showing a massive discount from the 17.01 high to the 5.93 level, the price went sideways within a symmetrical triangle. Later, a bullish breakout appeared from the dynamic 20-day EMA, initiating the bull run. However, the ongoing bullish impulse failed to overcome the 100-day SMA line and went sideways at that line.
In the volume structure, the most active level since March 2024 is at 7.06 level, which is within the recent order block.
Based on the daily outlook, a considerable downside correction is pending in this pair, where the primary aim is to test the 7.59 support level. Moreover, a bullish rebound from the near-term dynamic line with a bullish break above the 100-day SMA could open a long opportunity, targeting the 14.00 psychological line.
