Uniswap Labs Class Action Suit Has Little Impact on UNI
- Uniswap Labs gets hit with a class action suit for allowing the fraudulent activity.
- Earlier this week, Uniswap was in the news for the launch of a new ventures division.
- Uniswap is not alone in being sued by users, with Coinbase recently getting hit with a class-action suit.
Uniswap (UNI) enables users to swap, earn, and build on a decentralized crypto trading protocol. With heightened regulatory scrutiny in several key jurisdictions, exchanges are also coming under fire from crypto traders and enthusiasts.
Class action lawsuits bring unwanted attention amidst heightened regulatory scrutiny.
Uniswap Users Accuse Uniswap Labs of Allowing Fraudulent Activity
This week, news hit the wires of a class action suit against Uniswap Labs. According to media reports, an investor has alleged that Uniswap Labs and its investors are responsible for losses resulting from a failure to comply with securities laws.
The investor alleges that a failure to implement appropriate KYC measures and register as a broker-dealer with the SEC resulted in cybercriminals carrying out pumps and dumps on the Uniswap Protocol.
The investor also claims Uniswap founder Hayden Adams and investors Paradigm, AH Capital Management, Andreessen Horowitz, and Union Square Ventures are culpable.
For Uniswap Labs and Uniswap’s native token UNI, there was little reaction to the news of the class action suit. Currently, there are grey areas in the U.S regulatory environment, with the Ripple v SEC case considered by many as pivotal to what lies ahead from a regulatory standpoint.
The latest news comes as Uniswap Labs embarks on a new journey with Uniswap Labs Ventures. On Tuesday, FX Empire reported on the launch of Uniswap Labs Ventures, which targets Web3.
UNI Price Action
At the time of writing, UNI was down 0.29% to $9.630. The early pullback comes after two consecutive days in the green. On Wednesday, UNI rose by 3.76%, following a Tuesday gain of 3.67%.
UNI will need to avoid the $9.554 pivot to move through the First Major Resistance Level at $9.836.
Broader market sentiment would need to improve to support a breakout from a Wednesday high of $9.730.
In the event of another extended rally, UNI should test the Second Major Resistance Level at $10.013.
A fall through the pivot would bring the First Major Support Level at $9.377 into play. Barring an extended sell-off throughout the day, UNI should avoid sub-$9.300. The Second Major Support Level sits at $9.093.
The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. UNI sits below the 50-day EMA at $9.924. This morning, the 50-day EMA pulled back from the 100-day EMA. We also saw the 100-day EMA retreat from the 200-day EMA; UNI price negative.
UNI would need to move through the 50-day EMA to target April’s current high of $12.300.