In April 2022, traders decided to sue decentralized exchange (DEX) Uniswap, arguing that the platform allows criminals to offer scam tokens. According to the public prosecutor’s office, the dealers suffered great damage as a result, but the judge disagreed. According to the court, the platform is not liable for damage caused by fraud.
Lawsuit against crypto exchange Uniswap dropped
That’s according to a judgment filed Tuesday by Judge Katherine Polk Failla. Prosecutors Nessa Risley, James Freedland, Robert Scott and several others filed a lawsuit on behalf of all Uniswap users last year. class action started.
Uniswap’s developers should have done more to make it harder for scammers to issue tokens so traders wouldn’t have to suffer as much.
The defendant is not only Universal Navigation, Inc., the trading name of Uniswap Labs, and Uniswap founder Hayden Adams. Also involved are venture capital funds Andreessen Horowitz (a16z) and Union Square Ventures.
However, the judge does not think that Uniswap should be held responsible for the scam tokens. “In a perfect (or at least more transparent) world, prosecutors should be able to track down the actual issuers of the tokens. With that information unavailable, prosecutors can only argue that Uniswap facilitated the transactions,” the judge said.
Apparently this is not enough to continue the process. Also, the existence of the governance token UNI and the fact that Uniswap Labs collects commissions from transactions were not enough for the court to change the situation. Rather than in court, the matter would be better resolved by the US House of Representatives.
Crypto scams are very common
According to the documents, those affected have traded with 40 different scams including Alphawolf Finance, Dogg Token, Ethereum Max, Ethereum ChainToken Rocket Bunny, Smooth Love Potion and even “StarLink”. So that’s a lot of different scams. Unfortunately, they are very common, according to research, it was the second most common form of fraud in 2022.
We are now a year further, but unfortunately not much seems to have changed. This year, scammers have embraced artificial intelligence (AI) as a new source of fraud. Fortunately, AI can also be used to uncover scams in droves.