Bittime – The United States Securities and Exchange Commission (SEC) appears to be targeting the wrong target. Their latest target is Uniswap, a reputable decentralized finance (DeFi) protocol, rather than fraudsters in the crypto world. This decision also sparked skepticism regarding the SEC's chances of success.
Uniswap vs Traditional Model Under Threat
We have been expecting an SEC investigation into Uniswap (UNI) since a year ago. Now, the SEC is preparing a lawsuit against Uniswap Labs after sending a Wells notice, an official warning before the SEC files a lawsuit.
It is important to note that this SEC step is not based on suspicions that Uniswap has committed financial fraud, market manipulation, or theft of funds. However, Uniswap's business model is considered to threaten the traditional securities intermediary model which is currently supervised by the SEC.
Uniswap is a decentralized protocol built on immutable blockchain code. Uniswap Labs does provide a portal for users to connect to the trading protocol.
However, its function is more like a taxi driver taking users to a stock exchange or broker, rather than like a stock exchange or broker itself.
The presence of Uniswap shows that billions of dollars worth of trading can occur on a decentralized protocol without individual or institutional intermediaries. The SEC's intermediary-focused regulatory model is threatened with extinction if this scenario materializes.
Check Today's Crypto Market:
Tough Legal Challenges for the SEC
The SEC's chances of winning this lawsuit are considered very low. Unlike other crypto cases where the SEC could use the ambiguous Howey test to accuse crypto tokens of being securities, this time the SEC had to go further.
They need to prove that Uniswap is an unregistered broker or exchange. This is what the SEC failed to do in the case against Coinbase Wallet and the civil lawsuit against Uniswap last year.
It is expected that the SEC will attempt to discredit this strong precedent with bold claims that Uniswap Labs and its relay operations, liquidity providers, front-end applications, and programmers are all part of the same operation or entity.
However, this argument is difficult to accept and risks broadly labeling software developers as unlicensed brokers, a concern that led Judge Katherine Polk Failla to dismiss the SEC's similar charges against Coinbase Wallet.
Lawsuit against Airdrop UNI
The SEC will also likely accuse Uni of being a security and the Uni token airdrop of being a distribution of securities. This would be an opportunity to test the SEC's theory of airdrops in court.
This issue is also at the center of the lawsuit that the DeFi Education Fund (the Uni token-funded entity) filed against the SEC.
The SEC will cite longstanding precedent that states free stock dividends to shareholders are considered an offer or sale of securities, assuming the companies distributing them hope it will increase the price of the securities they hold.
However, this precedent is considered weak because it focuses on objects that are already securities in the form of publicly traded shares.
The SEC's attempt to characterize airdrops as securities offerings risks expanding its jurisdiction into the realm of customer rewards points, airline miles, and other trivial matters.
After all, Unions don't function like stocks. The Union does not provide binding voting rights and does not provide shareholder status in the litigation process. The token fee revenue-sharing option was also never activated. Uni is more like a meme coin than an investment contract.
Also Read How To Buy Crypto:
Conclusion: Should the SEC Focus Elsewhere?
Instead of targeting Uniswap, it would be wise for the SEC to focus on scam schemes in the name of DeFi (fake DeFi).
Uniswap is a well-funded defendant, a reputable player, and offers a truly decentralized product, meeting the SEC's previously stated criteria for avoiding designation as an investment contract.
The lawsuit against Uniswap seems like a misguided strategy. However, this case could set an important precedent for DeFi and crypto regulation as a whole.
How to Buy Uniswap (UNI) on Bittime
You can buy and sell Uniswap (UNI) easily and safely via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Uniswap (UNI) is available on Bittime with the market pair UNI/IDR. To be able to buy UNI IDR at Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Uniswap (UNI) on Bittime.
Monitor price chart movements of Uniswap (UNI), Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and other cryptos to find out today's crypto market trends in real-time on Bittime.
Read Also:
Understanding Uniswap (UNI), a Revolutionary DeFi Platform
Solana Meme Coin: Bonk! Soaring Crazy, Can You Still Make Money?
Internet Computer Price Prediction (ICP) 2024-2030: Will Prices Continue to Soar?
DISCLAIMER: This article is informational and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
Comments
0 comments
Please sign in to leave a comment.