Class-Action Suit Against Uniswap Dismissed Based On the Nature of Blockchain

A class-action suit between Uniswap Labs and its CEO Hayden Z. Adams and plaintiffs over the money users lost to scam tokens on the exchange has been dismissed by Judge Katherine Polk Failla.

According to the court documents, the plaintiffs claimed that they invested in what turned out to be scam tokens that were issued and traded on Uniswap. However, the Judge dismissed the complaint, stating there’s no identifiable defendant and Uniswap cannot be held liable as a stand-in.

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She noted that:

Due to the Protocol’s decentralized nature, the identities of the Scam Token issuers are basically unknown and unknowable, leaving Plaintiffs with an identifiable injury but no identifiable defendant.

The complaint was filed in 2022 with 6 lead plaintiffs, who are represented individually and on behalf of all others similarly situated. The plaintiffs alleged that the defendants “have contributed millions of dollars’ worth of tokens to liquidity pools on the Protocol, thus enriching themselves to the tune of millions of dollars” at the expense of the users.

The complaint also claims that Unisawp holds 88% of the total amount of UNI tokens, which provides disproportionate control over the governance of the exchange.

Additionally, the judge explained that the dismissal is party based on the fact that plaintiffs hoped to sue defendants since the current state of crypto regulations “leaves them without recourse.”

What made waves among crypto enthusiasts is the fact this dismissal clearly classified Ethereum and Bitcoin as “crypto commodities.” This distinction comes at a crucial time when regulators can’t seem to properly define digital assets, with some seeking to identify them as securities.

Judge Failla is also the one overseeing the SEC’s lawsuit against Coinbase over alleged law violations.

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