The court demonstrated an uncommon mastery of DeFi technology and advised the defendants to take their grievances to Congress instead.
Plaintiffs who claimed they lost money as a result of scam tokens on the decentralized cryptocurrency exchange filed a class action lawsuit against Uniswap Labs and its CEO, foundation, and venture capital supporters. The lawsuit was rejected by the United States District Court for the Southern District of New York. The Securities and Exchange Commission’s complaint against Coinbase is being heard by the same judge who rendered the dismissing decision, Katherine Polk Failla.
CryptoCaster Quick Check:
Six people who purchased tokens on Uniswap between December 2020 and March 2022 filed the lawsuit. They claimed that Uniswap Labs controlled liquidity pools on the protocol, including those made by the con artists they lost money to, on behalf of a “nationwide class of users”.
Stay in the know on crypto by frequently visiting Crypto News Today
April 2022 saw the filing of the lawsuit. Under the Securities Act of 1933 and the Securities Exchange Act of 1934, the defendants sought the revocation of the (smart) contracts they had signed in order to purchase the fraudulent tokens.
The plaintiffs contended that Uniswap’s conduct supported their claim since it used routers under its control to process protocol transactions, retained “liquidity provider funds and newly created tokens in Uniswap’s
The court stated in her ruling that neither party was aware of the identity of the con artists, and instead of bringing an unlawful solicitation claim against the con artists, the plaintiffs were bringing an online statement claim against the defendants:
“Undaunted, they now sue the Uniswap Defendants and the VC [venture capital] Defendants, hoping that this Court might overlook the fact that the current state of cryptocurrency regulation leaves them without recourse, at least as to the specific claims alleged in this suit.”
The court did not ignore that information:
“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.”
Additionally, the judge made general remarks. over the claims made by the plaintiffs over the core and router contracts, she wrote:
“[I]t defies logic that a drafter of computer code underlying a particular software platform could be liable under Section 29(b) [ of the Exchange Act] for a third-party’s misuse of that platform.”
Additionally, the judge made general remarks. The court noted the unsuccessful class action brought against Coinbase in 2022 for unregulated securities sales in her rationale, according to the author of the plaintiffs’ claims about the core and router contracts. The case was thrown out with prejudice, which prevents a retrial.
The action, according to community comments, demonstrated a significant depth of understanding of decentralized finance.
If this article brought you clarity, insight, or value—support the work that made it possible.
At CryptoCaster, we report on Web3, crypto markets, and institutional finance with no billionaire owners, no shareholders, and no hidden agenda. While mainstream media bends toward Elon Musk, BlackRock, and JPMorgan narratives, we stay focused on what matters: truth, transparency, and the public interest.
We don’t just cover the headlines—we investigate the power structures behind them. From FTX and Ripple to the quiet push for CBDCs, we bring fearless reporting that isn’t filtered by corporate interests.
CryptoCaster is 100% paywall-free. Always has been. To keep it that way, we depend on readers like you.
If you believe independent crypto journalism matters, please contribute—starting at just $1 in Bitcoin or Ether. Wallet addresses are below.
Your support keeps us free, bold, and accountable to no one but you.
Thank you,
Kristin Steinbeck
Editor, CryptoCaster
Please Read Essential Disclaimer Information Here.
© 2024 Crypto Caster provides information. CryptoCaster.world does not provide investment advice. Do your research before taking a market position on the purchase of cryptocurrency and other asset classes. Past performance of any asset is not indicative of future results. All rights reserved.
Contribute to CryptoCaster℠ Via Metamask or favorite wallet. Send Coin/Token to Addresses Provided Below.
Thank you!
BTC – bc1qgdnd752esyl4jv6nhz3ypuzwa6wav9wuzaeg9g
ETH – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
CRYPTOCASTER HEATMAP
