A federal judge has dismissed an amended class action lawsuit against Decentralized Crypto Exchange Uniswap with prejudice, marking another legal victory for the protocol and its developers.
Uniswap’s head of policy and associate general counsel Brian Nistler says Judge Katherine Polk Failla dismissed the Risley class action against Uniswap Labs and founder Hayden Adams after previously dismissing related federal claims.
The ruling addresses the plaintiffs’ theory of liability.
“Plaintiffs’ liability theories continue to rely on the fact that Defendants ‘facilitated’ the scam transactions by providing a marketplace and facilities for bringing together buyers and sellers of tokens[.]Although the claims have changed, the result is the same: plaintiffs cannot hold defendants liable for the misconduct of the unidentified third-party issuers.
Failla previously rejected similar arguments.
“It defies logic that a drafter of a smart contract, a computer code, can be held liable… for misuse of the platform by a third party.”
The lawsuit alleged that Uniswap facilitated trading of so-called scam tokens that caused investor losses. In dismissing the complaint, the court referred to the decentralized structure of the protocol and the difficulty in identifying the alleged token issuers.
“Due to the decentralized nature of the Protocol, the identities of Scam Token issuers are essentially unknown and unknowable, leaving plaintiffs with an identifiable injury but no identifiable defendant… As set forth in the remainder of this opinion, the Court dismisses their complaint in its entirety.”
Adams characterizes the outcome as a new legal precedent, arguing that open source developers are not liable for the way third parties use their code.
Follow us on X, Facebook and Telegram
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
Surf to the Daily Hodl mix
Generated image: Midjourney