Uniswap, the leading decentralized exchange (DEX) platform, experienced a significant drop in the price of its native UNI token following news of increased scrutiny from the Securities and Exchange Commission (SEC). UNI plummeted over 17.7% in the past 24 hours and is currently trading at $9.10. UNI also dropped a place from the 20th largest cryptocurrency by market capitalization to the 21st, and currently holds a market cap of $5.4 billion. Holders of UNI tokens, which operate on the Ethereum blockchain, possess the ability to vote on proposed changes to the Uniswap protocol.

Uniswap operates as a decentralized exchange, allowing individuals worldwide to trade cryptocurrencies without the need for a centralized intermediary like Coinbase. Uniswap Labs, the company behind the platform, recently announced that it had received a Wells notice from the SEC. A Wells notice is a notification from the regulatory body indicating its intent to take enforcement action.

The investigation into Uniswap has gained attention due to a “voluntary enquiry from a state authority” received by the Ethereum Foundation, as revealed in a commit message on GitHub last month. The foundation did not disclose the identity of the “state authority” and has yet to respond to requests for comment.

The SEC has targeted several crypto companies on allegations of selling unregistered securities and has been investigating Uniswap for an extended period. Uniswap still remains a highly popular DEX platform, boasting a total value locked of $6.2 billion and daily trading volume of over $3 billion.