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Just in: Uniswap (UNI) class action lawsuit dismissed

on Aug 30, 2023
  • Uniswap enjoys a win in a suit that users filed against the DEX.
  • Some users accused the protocol of selling securities disguised as digital assets.
  • The victory comes after massive legal proceedings and an evaluation of Uniswap’s regulatory compliance.

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The Uniswap community cheered positive news after the judge dismissed a class action suit against the decentralized exchange. The victory comes after several legal proceedings and an evaluation of the protocol’s regulatory compliance.

Details about Uniswap’s class action lawsuit

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Uniswap faced the class action lawsuit after the allegation that the DEX sold securities disguised as digital assets. The plaintiffs accused Uniswap of violating securities laws as they questioned the legitimacy of the tokens that the platform distributed.

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For instance, North Carolina resident Nessa Riley claimed to have lost $10,400 invested across Matrix Samurai, Rocket Bunny, and EtehreuMax crypto projects. While her case shows how market participants are susceptible to risks, Riley claims Uniswap didn’t adequately scrutinize assets on its platform, exposing users to scammers.

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Such developments had many speculating that Uniswap could be operating pump-and-dump schemes.

The court dismissed the lawsuit, stating that software misuse does not create liability for developers. Meanwhile, Uniswap’s victory might set grounds for future regulatory issues involving decentralized finance (DeFi) projects.

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Bigger win than XRP?

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Bill Hughes of Consensys believes Uniswap’s ruling will have more implications in the crypto regulatory landscape than XRP’s partial victory against the SEC. Hughes supports that a trading software/crypto exchange can’t be liable for customer losses emerging from third-party token issuers.

While the legal path remains long, Uniswap’s decision favors decentralized platforms. Meanwhile, it may encourage other similar projects to defend themselves with their decentralized nature whenever they encounter legal disputes. That will challenge lawmakers to consider their strategies when monitoring this innovative industry.

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