Key Insights:
Uniswap has been released from all charges in the SEC case related to the listing and trading of "Scam Tokens".
The Second Circuit Appellate Court said Uniswap cannot be held responsible for the tokens listed on its platform, validating the lower court's ruling in August 2023.
Uniswap has crashed from $19 in Dec 2024 to $5.8 at press time.
A breakout of the descending triangle pattern could bring a rally till $10 for UNI, while a breakdown could lead to a fall till $3.8.
The Second Circuit Court of Appeals has released Uniswap from all accusations related to the "Scam Tokens" case filed by the US SEC last year. The court sided with Uniswap, claiming that Uniswap cannot be held responsible for the tokens traded on its platform in the same way Nasdaq cannot be held responsible for fraudulent securities listed on its exchange.
The court further elaborated (based on Uniswap's appeals) that a smart contract was used to automate the listing and trading of tokens on Uniswap, and this smart contract, being devoid of any bias, cannot be held responsible for the tokens listed on its platform, and neither can Uniswap be held responsible for it.
Another judgment on the same case made by the court said that promoting the $UNI token did not mean that Uniswap (or its executives) promoted scam tokens for their own personal gain, which was alleged by the SEC.
SEC filed this case against Uniswap in 2022, claiming that the decentralized exchange was responsible for the listing and trading of scam tokens. Allegations also accused Uniswap of soliciting investments for these scam tokens.
The charges were brought under the Exchange Act and Securities Act of 1934 are summarized below
Uniswap was accused as the seller of the "tokens" that were traded on its platform.
Uniswap VCs, executives, and developers were accused of benefitting personally from the sales of these tokens.
The lower court of the US District Court for the Southern District of New York had dismissed the case on its merits in August 2023, but the SEC sought an appeal at the Second Circuit Appellate Court in the same year.
Another similar case was filed during the previous Biden Administration, under then-SEC Chairman Gary Gensler on 10 April 2024, following which the UNI token collapsed 10% within a day. The agency served a Wells Notice that also covered illegal securities offering, but that case lies beyond the scope of this article
Uniswap Token's Price Trend in the Last 7 Days
CoinMarketCap
Uniswap has managed to get one of the two key cases dismissed against it in the court, the other being the SEC Wells Notice of illegal securities offering.
Going forward, the decision by the appellate court will act as a bulwark protecting decentralized exchanges like Uniswap, Jupiter, Raydium, SushiSwap, PancakeSwap and several others against scam tokens.
Both Ethereum and Solana have seen the creation of thousands of tokens in their blockchains during the memecoin rush, and therefore the decentralized exchanges on these platforms are at the highest risk of getting hit by scam tokens.
Uniswap has been in a falling trend since December 2024 from $19 to $5.88 at press time. The token has been consolidating in a descending triangle pattern since December, and if the falling trend continues, it could see levels of $3.8 arriving soon.
Uniswap 1 D Charts Showing Descending Triangle
Tradingview
On the other hand, if a breakout from the descending triangle takes place, Uniswap could see its price jumping back to $10 within Q2, 2025. This breakout becomes highly probably as the indicators on 1D charts signal tha UNI has entered oversold territory.
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