U.S. judge dismisses lawsuit against Uniswap over scam tokens

U.S. District Judge Katherine Failla dismisses a lawsuit filed by a group of six investors against Uniswap in a recent lawsuit.

The group took action against Uniswap after buying crypto tokens through the decentralized protocol that turned out to be scam tokens. The court held that just because investors bought the scam tokens on Uniswap, the decentralized protocol itself is not liable. The group claims that the suit was based on the assumption that the tokens were securities. This suggests that the Uniswap protocol is an exchange platform for trading securities.

In dismissing the lawsuit, however, Failla referred to Bitcoin and Ethereum as "cryptocommodities." The difference was also part of her reasoning for dismissing the case. Failla said she was not convinced by the argument that Uniswap's token sales fell under the Exchange Act.

The judge also said the current state of cryptocurrency regulation did not provide a basis for the case. There is regulatory uncertainty in the U.S. as to whether cryptocurrencies are securities.