Uniswap Labs Has Been Sued

Uniswap Labs, the company of Uniswap, the most used decentralized exchange, has been sued. The accusations drew attention.

A class action lawsuit has been filed by a user against Uniswap Labs, the company of decentralized exchange Uniswap. The lawsuit, filed by an American named Nassa Risley, allegedly caused fraud due to the exchange's failure to perform identity checks and its fee structure. The 68-page lawsuit accuses Uniswap founder Hayden Adams, as well as its investors Paradigm, Andreessen Horowitz, and Union Square. Risley argues that Uniswap should be registered with the US Securities and Exchange Commission (SEC) but is not, and scammers are making 'pump-dump' transactions with the Uniswap protocol. Plaintiff alleges that he and other users lost money due to these malicious individuals and that Uniswap Labs did not do enough to prevent fraudulent activities. In addition, Risley argues that he and other users might have avoided the collapse of tokens such as EthereumMax, Bezoge Earth, Matrix Samurai, Alphawolf Finance, Rocket Bunny, and BoomBaby.io had they been warned with proper disclosures in securities laws. Plaintiff also alleges that Uniswap profited from listing many unregistered securities by raising transaction fees. While it does not seem possible to regulate decentralized exchanges, it is known that the SEC is working on this. Last year, SEC Chairman Gary Gensler said, “Decentralized finance is unthinkable outside of regulation. Some platforms act like companies licensed from the SEC.” It was later learned that the SEC had started an investigation for Uniswap Labs.