As another signal of mounting regulatory stress on the industry of cryptocurrency, the Securities-and-Exchange-Commission (SEC) of the United States is initiating the investigation of Uniswap Labs, which is known as the force at the back of the crypto exchange having the same name, as reported on Friday by the Wall-Street-Journal. People knowing the matter stated that the securities department is gathering information regarding how the investors utilize Uniswap (the largest crypto exchange across the world) and how the marketing of the platform is carried out. The investigation is said to be in its initial phases, so it may not level charges of misconduct.
It has been said by a Uniswap spokesperson that the firm is devoted to abide by the regulations and laws governing the crypto industry along with giving information to the regulatory authorities for helping them out in any inquiry. UNI (the native token of Uniswap) plunged to more than 8% in a short time on Friday; nevertheless, it re-established its position later in the week, as per CoinMArketCap.com’s provided data. Notwithstanding the dearth of intermediaries in the decentralized exchanges, Gary Gensler (the chair of the SEC) signalled recently that such exchanges might not be out of the regulation circle.
In the last week, the charges had been brought by the SEC against Satish Kumbhani, BitConnect’s (a crypto exchange which turned out to be a typical Ponzi scheme robbing nearly US$2B and now it is defunct) founder. The department accused him of intentionally misleading the investors about the firm’s capability for collecting 40% returns. Glenn Arcaro, the promoter of the company, was also alleged by the commission for acquiring roughly US$24M through referral commissions from BitConnect. In May, five persons have already been accused of being engaged in the fraud of BitConnect.
Recently, the SEC became closer to its success in a lawsuit against Ripple Labs (a prominent exchange for developing and trading XRP token) as it was permitted by the court to access the employee messages of the exchange through its chat application Slack. It is considered by the securities department that those messages have a significant linkage with the claims of the prosecution. In 2020’s December, Ripple Labs were sued by the SEC in court for had allegedly traded its XRP as unregistered securities. Nonetheless, the case has not yet been decided by the court, and it is expected that it would be more prolonged.