Uniswap, the largest decentralized exchange, has removed the HEX token from its interface after it was recently declared unregistered security by the United States Securities and Exchange Commission (SEC). This comes as another blow for the token in what has been an unpleasant week so far.
This unfavorable run has had an impact on the price of HEX, which is currently valued at $0.00486457. According to CoinGecko data, the token’s price has declined by more than 12% in the last day, as it continues in a downward trend.
Uniswap Withdraws Support For “Unregistered Security” HEX
It has delisted the HEX token from its interface, placing it in the protocol’s “Unsupported List.” It is a list manually curated by Uniswap Labs – the developer of the protocol – to restrict tokens that violate trademarks, projects that have proven to be scams, or otherwise based on legal considerations.
Following the SEC’s declaration on Monday, July 31, it appears that Uniswap is distancing itself from the HEX token. This declaration came when the financial regulator filed a lawsuit against Richard “Heart” Scheuler, the founder of HEX, PulseChain, and PulseX (a Uniswap fork).
In the court document, the Securities and Exchange Commission mentioned Uniswap as one of the factors behind its selection of the US District Court for the Eastern District of New York as the case’s venue.
The commission said it chose this venue because many of the transactions highlighted in the lawsuit occurred on Uniswap, which is headquartered in Brooklyn, New York.
The SEC accused the controversial Richard Heart of offering an “unregistered security”, the HEX token. Other angles of the case include HEX’s staking mechanism, its lock-up schedule, and how Heart manipulated the token’s supply by “recycling” transactions.
The regulator claims that, by making “grandiose” promises of wealth, Heart was able to raise $1 billion from investors, which he “inappropriately” spent on luxury goods.
The Crypto Community Reacts
After the news of Uniswap blocking traders from trading the HEX token broke out, there has been a mixed reaction from the crypto community on Twitter.
Several tweets are questioning the “decentralized” nature of Uniswap, with some users even going as far as giving the protocol a bad review on various review platforms.
It just halted Hex trading
I thought this was DeFi pic.twitter.com/oB7av4a9gB
— TrevonJames.eth (@TrVon) August 2, 2023
However, some Twitter users believe that Uniswap made the right call, as they feel the SEC’s case against Richard Heart is plausible.
Although It has removed HEX from its front end, it appears that it can still be traded on the decentralized exchange through alternative hosted websites.
A Twitter user revealed that there are numerous Uniswap front ends – created by members of the HEX community – to trade the delisted token or to interact directly with the protocol’s smart contract to do so.