Uniswap Labs has responded to the U.S. Securities and Exchange Commission’s Wells Notice, asserting that its protocol does not fall under the agency’s regulatory jurisdiction. The response emphasizes the autonomous nature of Uniswap’s decentralized finance (defi) technology and argues against the classification of its activities as operating an exchange or broker. Uniswap Responds to SEC […]
Bitcoin News
UNI Price Soars 20% As Uniswap Labs Pushes Back Against SEC’s Wells Notice
Uniswap Labs, the creator of one of the largest decentralized trading platforms, is challenging a potential enforcement action by the US Securities and Exchange Commission (SEC), arguing that crypto tokens should not be classified as securities.
The New York-based firm recently refuted the allegation that it operated as an unregistered exchange and broker-dealer. This response follows the SEC’s issuance of a Wells Notice to Uniswap Labs, signaling its intent to recommend legal action against the company.
Uniswap Labs Challenges SEC’s Claims
In a 40-page filing submitted to the SEC, Uniswap Labs outlined numerous reasons why the agency’s pursuit of legal action should be reconsidered. The SEC’s claims are primarily based on the assumption that all tokens are securities, a premise that Uniswap Labs disputes.
Marvin Ammori, Chief Legal Officer of Uniswap Labs, emphasized that tokens are merely a file format for value and not inherently securities. He criticized the SEC’s attempt to redefine the terms “exchange,” “broker,” and “investment contract” to encompass Uniswap’s operations.
This year, the SEC has taken action against numerous crypto firms through Wells notices, lawsuits, or settlements.
The commission’s scrutiny has increasingly focused on Ethereum and decentralized finance players, including Uniswap, ShapeShift, TradeStation, and Consensys. Additionally, reports suggest that the Ethereum Foundation is under investigation.
Distinction Between Tokens And Securities
Uniswap Labs believes that the SEC’s case against them is flawed. It fails to recognize the distinction between tokens as files for value and tokens as securities.
If the SEC proceeds with a lawsuit accusing Uniswap Labs of operating as an unregistered exchange, it risks facing adverse consequences regarding its authority over crypto tokens.
Uniswap Labs warned that such litigation could set a precedent undermining the SEC’s ongoing rulemaking efforts. The company expressed its willingness to litigate if necessary and expressed confidence in a favorable outcome, stating:
But we’re prepared to fight. Our lawyers are 2-0 in high-profile SEC cases. Andrew Ceresney, a former head of enforcement at the SEC, represented Ripple in their victory over the SEC. Don Verrilli, a former U.S. solicitor general, has argued more than 50 cases before the U.S. Supreme Court and represented Grayscale in its successful case against the SEC.
SEC Chairman Gary Gensler has consistently maintained that decentralized exchanges are not genuinely decentralized and should fall under the regulator’s purview.
Gensler has also argued that many digital assets qualify as unregistered securities subject to SEC regulations. Uniswap Labs, in its response, contended that its governance token, UNI, does not meet the requirements of the Howey Test, a legal framework used to evaluate investment contracts.
The company also disputed the SEC’s classification of LP tokens, which are used as securities for liquidity provision in Uniswap pools. Uniswap Labs asserted that LP tokens are accounting tools rather than investment instruments.
Uniswap’s native token UNI has seen significant gains of nearly 20% in the last 24 hours alone, as the market rebounded from a two-month consolidation period to trade at .34.
Featured image from Shutterstock, chart from TradingView.com
US Mega Banks JP Morgan And Wells Fargo Unveil Bitcoin Exposure As BTC Drops To $60,000
JP Morgan and Wells Fargo, two of the largest banks in the United States, have announced their investments into Spot Bitcoin ETFs, unveiling their exposure to BTC, the world’s largest cryptocurrency. This significant development comes amidst the persistent downturn in the crypto market, resulting in BTC’s price dipping slightly above ,000.
US Financial Banks Expose Spot Bitcoin ETF Holdings
American financial services companies, Wells Fargo and JP Morgan, have revealed their exposure to BTC by disclosing their adoption of Spot Bitcoin ETFs in a recent filing. This decision to invest in BTC ETFs marks a notable change from the banks’ previous cautious approach to cryptocurrencies.
Wells Fargo revealed in its new filing to the United States Securities and Exchange Commission (SEC) that it currently holds 2,245 shares of Grayscale Bitcoin Trust (GBTC), valued at 1,207, which it has since converted into an ETF. Additionally, the American bank holds 37 shares of the ProShares Bitcoin Strategy ETF (BITO), valued at ,195.
On the other hand, JP Morgan, which holds about .9 trillion in Assets Under Management (AUM), has revealed its total Spot BTC ETF holdings in an SEC filing. The bank reported that it had purchased about 0,000 worth of shares of BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC), Grayscale Bitcoin Trust (GBTC), Bitwise Bitcoin ETF, and ProShares Bitcoin Strategy ETF (BITO).
Moreover, JP Morgan also owns about 25,021 shares valued at ,000 in cryptocurrency ATM provider, Bitcoin Depot. The investment company also unveiled its exposure to Spot BTC ETFs just hours after Wells Fargo’s announcement.
Despite the regulatory uncertainty and the market’s continuous volatility, institutional interest in cryptocurrencies, particularly BTC, has been growing rapidly. Bloomberg senior analyst, Eric Balchunas also forecasted that more financial services companies would likely follow JP Morgan and Wells Fargo’s footsteps to unveil holdings in Spot Bitcoin ETFs as market makers or Authorized Participants (APs).
BTC Price sUFFERS More Declines
Despite the increasing interest from traditional financial institutions seeking exposure to BTC, the price of the cryptocurrency has shown a surprising lack of bullish momentum. Since its halving event on April 20, BTC has been trading sideways, witnessing continuous declines that have pushed its price down to around ,000 previously.
The cryptocurrency, which recorded an all-time high above ,000 in March, has seen a 14.20% drop over the past month. Additionally, Bitcoin gave up a large portion of its gains before the halving and is currently trading at ,494, according to CoinMarketCap.
Blockchain analytics platform, Santiment, revealed that the ongoing lack of interest in BTC and the broader market sentiments could be a strong sign that the cryptocurrency is getting close to its bottom.
Wells Fargo Holds Spot Bitcoin ETFs, Reveals SEC Filing of Grayscale Shares
Wells Fargo, a major US banking entity, is now storing a spot bitcoin ETF for its customers, as revealed in a new SEC filing, holding 2,245 shares of the Grayscale Bitcoin Trust (GBTC), which was recently converted into an ETF. Though the value of these shares stands at 1,207, a small fraction of the bank’s […]
Bitcoin News
Wells Notice Wallop: Robinhood Bleeds 164 Million Dogecoin In Mass Exodus
The Shiba Inu’s reign as king of memecoins may be facing a ruff patch. Dogecoin (DOGE) prices dipped this week after news broke of the US Securities and Exchange Commission (SEC) issuing a Wells Notice to Robinhood, a popular crypto exchange.
The notice, a precursor to potential enforcement action, alleges Robinhood violated multiple securities laws. This sent shockwaves through the crypto community, with many investors, particularly those holding large amounts of DOGE (often nicknamed “whales”), pulling their funds out of Robinhood.
The most significant outflow involved a whopping 164 million DOGE, worth roughly million at the time, being transferred out of the exchange. This mass withdrawal by a whale investor likely contributed to the market jitters surrounding DOGE.
Another 164M $DOGE, worth M, have been transferred out of Robinhood.
These transactions occurred after the platform received a Wells notice from the SEC. #DOGE #Robinhood #CryptoNews
Source: MartyParty pic.twitter.com/oKxW1S8pTD
— Bitcoinsensus (@Bitcoinsensus) May 8, 2024
DOGE Price Wobbles: Short-Term Blues Or Long-Term Woof?
The price of DOGE tumbled 5.8% in the 24 hours following the Robinhood news. However, analysts caution against a knee-jerk reaction. While the legal troubles undoubtedly cast a shadow on Robinhood, the DOGE outflow, including the 164 million transfer, might not be the sole culprit behind the price dip.
Transferring cryptocurrency from an exchange to a personal wallet is often seen as a bullish move, indicating an intention to hold for the long term.
Dogecoin And Bitcoin: A Tale Of Two Blockchains
Another factor influencing DOGE’s price is its tight correlation with Bitcoin (BTC). Both currencies operate on the Proof of Work (PoW) consensus mechanism, which some see as outdated compared to newer, energy-efficient models.
The recent pullback in the broader crypto market, especially in Bitcoin, likely played a role in dragging DOGE down as well.
Rocky Road To .20? DOGE Faces Support Hurdle
DOGE enthusiasts were eyeing a price target of .20, but the recent drop presents a roadblock. The memecoin dipped below the crucial .15 support level, raising concerns about a further decline.
Analysts point to a potential support zone between .143 and .146, but a fall below that could trigger a more significant price correction.
Bullish Signs Amidst The Dip
Despite the short-term pessimism, there are glimmers of hope for DOGE. The buy orders for DOGE currently outweigh sell orders by a significant margin, suggesting continued investor interest.
Related Reading: Forget The Price Dip: Ethereum Network Activity Hints At Imminent Takeoff
Additionally, the memecoin’s Relative Strength Index (RSI) sits at a neutral 47, indicating there’s room for new buyers to enter the market. Furthermore, DOGE managed to maintain a weekly price increase despite the daily drop, hinting at underlying resilience.
Doge Day Delayed, But Not Doomed
The coming weeks will be crucial for Dogecoin. The outcome of Robinhood’s legal battle with the SEC and DOGE’s ability to regain lost ground will determine its short-term trajectory. However, long-term forecasts for the memecoin remain cautiously optimistic.
Featured image from Yahoo Finance, chart from TradingView
SEC Issues Wells Notice to Robinhood Over Crypto Operations
A report indicates that the U.S. Securities and Exchange Commission (SEC) has issued a Wells Notice to the financial services provider Robinhood. This action by the SEC concerns the company’s operations in the cryptocurrency sector and its listing of crypto assets. SEC Mulls Enforcement Against Robinhood’s Crypto Ventures, Company Says It Is Cooperating The staff […]
Bitcoin News
Uniswap Labs Receives SEC Wells Notice, Founder Vows to Fight
In a recent social media post, Hayden Adams, the founder of Uniswap Labs, announced that the company has received a Wells notice from the Securities and Exchange Commission (SEC), expressing his disappointment and determination to contest the notice. SEC Sends Decentralized Exchange Uniswap a Wells Notice Hayden Adams, the founder behind the decentralized finance (defi) […]
Bitcoin News
Bank of America Merrill Lynch and Wells Fargo Begin Offering Spot Bitcoin ETFs to Clients, Report
Bank of America’s Merrill Lynch and Wells Fargo’s wealth management arm have reportedly begun offering some clients access to spot bitcoin exchange-traded funds (ETFs). Other investment platforms that offer some clients access to spot bitcoin ETFs include Fidelity, Charles Schwab, Robinhood Markets, and UBS. Major Banks Embrace Bitcoin ETFs Bank of America’s investment arm, Merrill […]
Bitcoin News
Federal Reserve Launches Fednow for Instant Payments — JPMorgan, Wells Fargo, and 33 Banks Onboard
The Federal Reserve has launched its Fednow Service for instant payments with 35 participating banks and credit unions, as well as 16 service providers. “The Federal Reserve is committed to working with the more than 9,000 banks and credit unions across the country to support the widespread availability of this service for their customers over time,” the U.S. central bank stated.
Fednow Officially Live
The Federal Reserve announced Thursday that its new system for instant payments, the Fednow Service, has launched with 35 participating banks and credit unions, the U.S. Department of the Treasury’s Bureau of the Fiscal Service, and 16 service providers. Participating financial institutions include BNY Mellon, JPMorgan Chase, Peoples Bank, U.S. Bank, and Wells Fargo Bank.
“The Fednow Service is designed to maintain uninterrupted 24x7x365 processing with security features to support payment integrity and data security,” the Federal Reserve detailed, adding:
The Fednow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.
Fed Chair Jerome Powell commented Thursday: “The Federal Reserve built the Fednow Service to help make everyday payments over the coming years faster and more convenient.” He continued: “Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid.”
Functioning as an interbank payment system, the Fednow Service operates alongside other well-established Federal Reserve payment services like Fedwire and FedACH. The Fed’s announcement described:
The Federal Reserve is committed to working with the more than 9,000 banks and credit unions across the country to support the widespread availability of this service for their customers over time.
Many people took to Twitter to comment on the new Fednow Service. A number of individuals believe that its launch paves the way for a central bank digital currency. However, the Federal Reserve has insisted that the Fednow Service is not related to a CBDC.
Some people believe that the Fednow Service eliminates the need for cryptocurrencies. Omid Malekan, adjunct professor at Columbia Business School, explained: “Arguing that Fednow eliminates the need for crypto (or even stablecoins) is like arguing in 2005 that replacing VHS rented from Blockbuster with DVDs eliminated the need for streaming. P.S. Fednow is 25 year old tech. America is just really late to the game.”
What do you think about the Federal Reserve launching the Fednow Service? Let us know in the comments section below.
Coinbase Shares Wells Response, Challenges SEC’s Change in Attitude Towards Its Core Businesses
On April 27, Coinbase, the crypto exchange based in San Francisco, made public the disclosure of its response to the Wells notice it had received from the U.S. Securities and Exchange Commission (SEC) back in March. The company maintained that the regulatory body’s enforcement actions were in direct contrast to the agency’s previous approval of the firm’s public listing via its S-1 filing. Coinbase asserted in its response to the SEC that it is the “innocent investors who stand to lose the most from the commission’s abrupt about-face.”
Coinbase Responds to U.S. Securities Watchdog’s Wells Notice
Coinbase’s CEO, Brian Armstrong, presented his company’s response to the U.S. securities regulator on Thursday, divulging their Wells response. In direct opposition to the SEC’s enforcement actions, Coinbase maintains a firm disagreement, while the correspondence made it clear that the regulator should have been aware of this stance when Coinbase went public.
The animosity between the two entities was further highlighted in Coinbase’s response, where the exchange explained that the SEC had neglected to provide clear guidelines for the regulator’s recent enforcement actions.
“If the commission had believed in April 2021 that Coinbase’s core businesses violated securities law, it would have been required by its own mandate to prevent the S-1 from becoming effective to protect the investing public,” the response says. “Instead, it allowed the offering to proceed, and millions of members of the public invested their savings in Coinbase. Investors could only infer by this approval that the Commission did not think Coinbase’s core business was unlawful.”
Coinbase CEO: ‘We’re Confident in the Facts and on the Law’
On Thursday, Armstrong reaffirmed Coinbase’s commitment to creating innovative products that promote economic freedom. “We are committed to building in the U.S. and around the world,” declared the Coinbase CEO. “We will defend ourselves and stand up for the rule of law.”
Coinbase’s Wells response conveyed its bewilderment at the regulatory body’s abrupt change in attitude, particularly given the exchange’s extensive interaction with the SEC during its public listing process. “The staff’s laundry list of proposed charges all rest on three primary legal theories, each of which is flawed and untested,” asserted the missive.
Coinbase’s Wells response comes on the heels of the company’s announcement that it had initiated legal proceedings in federal court, demanding that the SEC respond to their petition filed in July of 2022. Similarly, the Wells response pledged to continue cooperating with the SEC in the hopes of amicably resolving the matter.
What are your thoughts on Coinbase’s response to the SEC’s Wells notice and its stance on the regulatory body’s enforcement actions? Let us know in the comments section below.