Judge Dismisses Uniswap Lawsuit on Scam Token Liability

A federal judge in New York dismissed a class-action lawsuit against Uniswap Labs and its founder Hayden Adams on Monday, ruling that the decentralized cryptocurrency exchange cannot be held liable for fraudulent tokens traded on its platform. The decision ends a four-year legal battle initiated by investors who claimed significant losses from scam schemes facilitated through Uniswap's open-source protocol.

The case, filed in April 2022 in the U.S. District Court for the Southern District of New York, was brought by a group of investors led by Nessa Risley. The plaintiffs originally accused Uniswap Labs, Adams, and several venture capital firms—including Paradigm, Andreessen Horowitz, and Union Square Ventures—of enabling rug pulls and pump-and-dump schemes. They argued that Uniswap operated as an unregistered securities exchange and broker-dealer, profiting from transaction fees on tokens issued by unidentified third parties. The suit sought to hold the defendants responsible for losses incurred when these scam tokens were bought and sold on the platform, which allows anyone to list assets without prior approval.

Judge Katherine Polk Failla dismissed the initial complaint in...