Uniswap Labs Wins Appeal in Unregistered Securities Sale Class Action

JH Kim

Summary

Uniswap Labs has reportedly won the appeal in the class action lawsuit regarding unregistered securities sales.
The court ruled that developers are not liable for third-party users' misuse of the platform.
This case has once again highlighted the importance of securities regulations related to smart contracts.

Uniswap (UNI) founder Hayden Adams announced on X (formerly Twitter) on the 26th (local time) that "Uniswap Labs has won the appeal in the class action lawsuit filed over allegations of unregistered securities sales."

He explained, "The Second Circuit Court of Appeals ruled that it is not logically sound to claim that developers who wrote smart contracts should be held liable under the Exchange Act for third-party users' misuse of the platform."

Previously, in August 2023, the Southern District Court of New York had dismissed the class action lawsuit filed by users against Uniswap Labs for alleged unregistered securities sales.

When filing the lawsuit against Uniswap Labs in April 2022, the plaintiffs claimed that "Uniswap Labs was not registered with the SEC as a broker-dealer, and failed to disclose to users that some coins listed on the platform had characteristics of securities," arguing that "this violated U.S. securities laws and could put investors at risk."

They further pointed out that "Uniswap took no measures to address this, and fraud remains rampant on the platform."