US investors sued Uniswap over violations of securities laws

The lawsuit says that the crypto exchange does not counteract fraudulent schemes that cause losses to ordinary users

14.04.2022 - 11:55

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What’s new? A group of US investors led by Nessa Risley has filed a class-action lawsuit against the decentralized cryptocurrency exchange Uniswap over violations of securities laws. Because Uniswap has not registered as an exchange or a broker-dealer with the US Securities and Exchange Commission (SEC), scammers can execute Pump & Dump schemes, the document says. Risley claims that the tokens traded on the platform are unregistered securities.

Class action lawsuit against Uniswap

Details of the lawsuit. The document says a lack of KYC (know-your-customer) and other identification checks “has led to rampant fraud on the exchange.” Risley claims that if it had had access to disclosure under securities laws, she and other investors could have avoided investment losses. The prosecutors expect the company to plead guilty and compensate for the damage caused, the amount of which will be determined by a court.

How did Uniswap respond? The platform’s representatives gave a comment to The Block, stating that the company intends to contest the lawsuit. They claim that the allegations are unfounded and the investors’ arguments are “factual inaccuracies.”

The Block’s material

What is Unsiwap? It is a decentralized protocol for the exchange of cryptocurrencies, created on the basis of Ethereum in 2018. The platform uses the native token, UNI, to provide liquidity.

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