Earlier this week, a class action lawsuit was filed against decentralized exchange Uniswap (UNI) for allegedly selling unregistered securities and failing to disclose those risks to its users.
Nessa Risley, an American Uniswap user, invested in EthereumMax, Matrix Samurai and Rocket Bunny between May and July of last year. Having invested around $10,400 in these low-capital digital tokens, Risley sued Uniswap, claiming he suffered “significant losses” as a result of his investment.
Uniswap Filed Class Action
It is alleged that Uniswap caused fraud due to its failure to perform identity checks and its fee structure. In the 68-page lawsuit petition, along with Uniswap founder Hayden Adams, investors of the stock market Paradigm, Andreessen Horowitz and Union Square are also accused.
Claiming that Uniswap was not registered with the SEC when it should have been registered, and that the fraudsters were making ‘pump-dump’ transactions with the Uniswap protocol, Risley said that he and other users lost money due to these malicious people, and that Uniswap Labs was involved in fraudulent activities. He says he didn’t do enough to prevent it.
The lawsuit filed by Kim & Serritella LLP and Barton LLP aims to turn victims like Risley, who has lost money on Uniswap since last April, into a class action lawsuit against the platform’s founders and developers.
SEC Starts Examining Uniswap
Although the SEC has studies on the regulation of decentralized exchanges, it remains unclear how the Court will decide against the exchange. Last year, SEC Chairman Gary Gensler said, “Decentralized finance is unthinkable outside of regulation. Some platforms act like companies licensed from the SEC,” he said, and it was later revealed that the SEC started an investigation for Uniswap Labs.
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