Uniswap Wins Full Dismissal in Scam Token Class Action Lawsuit, Court Rules Platform Not Liable for Third-Party Actions

Odaily News A U.S. federal judge has ruled to dismiss the remaining state law claims against Uniswap Labs and its founder Hayden Adams, bringing an end to this multi-year class action lawsuit. The plaintiffs sought to hold the platform accountable for losses incurred from trading "scam tokens" on the Uniswap protocol.

U.S. District Judge Katherine Polk Failla for the Southern District of New York issued the ruling on Monday, dismissing the plaintiffs' second amended complaint "with prejudice," finding that the plaintiffs failed to state a viable legal claim. The court noted that the plaintiffs had been given multiple opportunities to amend their complaint but were still unable to demonstrate that Uniswap should be held responsible for the misconduct of unnamed third-party token issuers.

The plaintiffs claimed losses due to "rug pulls" and "pump-and-dump" schemes, arguing that Uniswap "aided and abetted fraud" by providing a platform that matches buyers and sellers. However, the court explicitly stated that merely providing a decentralized trading platform does not constitute "substantial assistance" to fraudulent activities.

Judge Failla reiterated her previous view, stating that holding the developers of smart contract code responsible for third-party misuse on a decentralized platform is "logically untenable."

The case was originally filed in 2022 and initially included federal securities law allegations. Those securities-related claims were dismissed in 2023, and the Second Circuit Court of Appeals subsequently upheld that dismissal and remanded the remaining state law claims back to the district court for further proceedings. This latest ruling marks the formal conclusion of the case and further narrows the scope of applying state law to hold DeFi platform developers liable.