Uniswap's class-action lawsuit against it for fraudulent token sales was completely dismissed; the court ruled that the platform is not responsible for the actions of third parties.

A U.S. federal judge has dismissed remaining state law claims against Uniswap Labs and its founder, Hayden Adams, ending a years-long class-action lawsuit. The plaintiffs sought to hold the platform liable for losses from "fraudulent tokens" traded on the Uniswap protocol. Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York issued a ruling on Monday, dismissing the plaintiffs' second amended complaint with prejudice, finding that the plaintiffs failed to present a valid legal claim. The court noted that the plaintiffs had been given multiple opportunities to amend their complaint but still failed to prove that Uniswap was liable for the misconduct of unnamed third-party token issuers. The plaintiffs claimed losses due to "rug pulls" and "pump-and-dump" schemes and argued that Uniswap "assisted in the fraud" by providing a trading platform that matched buyers and sellers. However, the court clarified that merely providing a decentralized trading platform does not constitute "material assistance" in fraudulent activities. Judge Failla reiterated her previous view that holding developers of smart contract code liable for abuse by third parties on decentralized platforms is "logically untenable." The case, initially filed in 2022, included allegations under federal securities laws. Those securities allegations were dismissed in 2023, and the Second Circuit Court of Appeals upheld that ruling, remanding the remaining state law claims to the district court. This ruling formally concludes the case and further tightens the boundaries of state law application to the liability of DeFi platform developers.