The US District Judge has dismissed a lawsuit against Uniswap, which was brought in by a group of victim investors after losing money in a scam token.
In the lawsuit, investors claimed that the tokens they bought between December 2020 and March 2022 from the Uniswap decentralized exchange (DEX) turned out to be scam tokens and led to financial losses.
According to victims, these tokens qualify as securities, so they raised their claim under federal securities laws. It led to the identification of Uniswap as a security trading platform, and investors are entitled to take actions against the DEX.
However, Uniswap denies being labeled as a security exchange. The court said that Uniswap is a decentralized protocol, hence it is not responsible for the scam tokens. In the court filing, the Court declines to stretch the federal securities laws to cover the conduct alleged, and concludes that Plaintiffs’ concerns are better addressed to Congress than to this Court.
Following the dismissal of the lawsuit, the founder of Uniswap, Hyden Adams, shared relief, citing that it is motivating to see positive recognition from the US courts.
“I’m extremely happy to see how thoughtful some courts have been recently with regards to DeFi and crypto,” Hyden said, and he also highlighted key points from the filing.
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