A federal judge in New York dismissed a lawsuit filed against Uniswap claiming the company was liable for a fraudulent token sale that caused losses to plaintiffs.
The judge ruled that Uniswap was not responsible for the actions of token issuers who used its protocol to commit “rug pull” scams.
The plaintiffs argued that Uniswap was complicit in fraud and violated securities laws by facilitating the sale of unregistered securities.
Consensys attorney Bill Hughes commented on the decision on Twitter, saying it was a “major event” and “impacts the application of existing securities laws to DeFi more directly than the Ripple or TerraForm Labs cases.”
He added that the decision aligns with positions the cryptocurrency industry has taken for some time and that it would be an important case for the Second Circuit Court of Appeals to decide if the plaintiffs appeal. He also said there was “more to be learned” from the decision and that it was “exciting”.
*Not investment advice.