These times are not rosy for Uniswap and its owners as they are currently under serious interrogations from the United States SEC as to their activities and operations in the crypto exchange space. The DeFi platform is currently being questioned about its marketing strategies and users’ interactions with the platform. This is a frightening development for the exchange platform which has been rapidly growing since its inception. Judging by the looks of things, the decentralized platform is looking to be clamped down on with their activities largely restricted or even suspended.
SEC’s boss Gary Gensler voiced concerns about the platform earlier last month as he was skeptical about its rapid growth and expansion. He went further with the criticism of Uniswap and decentralized platforms in general stating that they were not fully decentralized systems. His argument remains that is based on the fact these platforms still charge fees for transactions and under governance just like centralized systems. Gary also claimed that these decentralized platforms use the offer of valuable tokens to keep their users and investors implying that there’s not much difference between centralized and decentralized platforms.
Even with the recent developments surrounding Uniswap, the price of the platform’s native token remains fairly stable. Currently, it is trading down at about 1.5% which implies that the price was not affected by the news and the ongoing investigations. The price-performance of the token has been positive since the beginning of the year. There are speculations as to the effect of this development on the platform and its users but for now, operations on the exchange are still going normally. The SEC has however not confirmed investigations of Uniswap and formal charges are yet to be seen.
There are also possibilities that a formal charge may not rise out of the Uniswap investigations as the probe is in the initial stages. Furthermore, US SEC is currently involved in disputes and lawsuits with the popular Ripple blockchain and other several crypto exchanges.
Uniswap and its rise
The emergence of Uniswap as a leading decentralized exchange in the summer of 2020 was a shocking development in the crypto world. Its rise came with the introduction of an airdrop of its native token which was embraced by thousands of people. The surprise airdrop generated so much hype that the token’s price experienced a rise. Even as the DeFi niche is no longer as inviting as it used to be, Uniswap has become a crypto giant as they have gathered numerous users.
Earlier in April, the DeFi platform crossed the $10 billion mark in its weekly volume, further declaring its position as a leading crypto giant. The platform is however believed to not be fully decentralized. This is because its user interface is still being controlled by a centralized authority.
The platform’s credibility was questioned when they blacklisted about a hundred tokens on the exchange. However, experts are hopeful that SEC’s regulations on the platform would not be too strict.
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