Uniswap (UNI), a decentralized exchange, is accused of selling unregistered securities and failing to expose the associated risks to its users. Nessa Risley, a Uniswap user from North Carolina, invested approximately $10,400 between May and July of last year in low-equity “meme coin projects” such as EthereumMax, Bezoge Earth, Alphawolf Finance, BoomBaby.io, Matrix Samurai, and Rocket Bunny. The trader has since suffered “significant losses” and therefore sought justice through legal action. Here are the details…
lawsuit from investor who lost money from meme coin projects
On April 4, Risley said that Uniswap did not perform identity checks and to “scams” who use the platform to list scam-like cryptocurrencies to commit widespread fraud. took legal action, claiming that it did not impose any securities restrictions. Two US law firms have filed lawsuits against Uniswap for “violating securities laws by offering and selling securities in the form of cryptocurrencies” to the decentralized exchange and its backers, including famous VC firms like A16z and Paradigm.
The lawsuit filed by Kim & Serritella LLP and Barton LLP aims to evolve into a class action lawsuit against the platform’s founders and developers, victims like Risley, who lost money in Uniswap since last April. It claimed that Uniswap did not disclose its “registration statements” for securities they sell to users, including information on the risk of associated investments.
SEC is investigating Uniswap
The class action also states that Uniswap Labs allows illegal activities on its platform such as “pump and dump” and “rugpull”. One of the main accusations targets the fee structure of the DEX, which encourages fraud by paying liquidity providers a portion of the fee for each transaction, according to the statement. As we reported on Kriptokoin.com, the US securities watchdog, the SEC, launched an investigation against Uniswap Labs last September as it sought to determine how customers use the exchange, how the exchange is marketed and how it operates in general. Earlier, SEC chair Gary Gensler outlined concerns about DeFi protocols, which he believes could be classified as the types of assets the Commission oversees.
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