- Uniswap witnesses a new class-action lawsuit alleging that it sold unregistered securities.
- The case has backing from VCs like a16z and Paradigm.
- Uniswap came into US SEC’s eyes last year when the entity opened an investigation into the platform exploring how it was being used and marketed.
A new class-action lawsuit was filed against Uniswap earlier in the week. This came as there are claims alleging that the DEX has been selling unregistered securities to the users without revealing the risks.
Two lawsuits have been filed against the DEX, the cases involving the significant venture capital companies a16z and Paradigm. The first one was filed by Nessa Rixley, a crypto investor as she alleges that she has gone through “substantial losses” due to her $10,400 investment in low-cap digital assets such as Matrix Samurai, EthereumMax, and Rocket Bunny between May and July of last year.
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She further claims that the DEX failed to conduct identity checks and impose securities restrictions on fraudsters who list scam-like digital tokens for conducting mass fraud via the platform.
Following this, other entities joined her as well, including its founder, Hayden Adams, and other backers like Paradigm, Union Square Ventures, Andreessen Horowitz, and AH Capital Management. The lawyers highlighted that the DEX failed to register as an exchange or broker-dealer.
Furthermore, the class action claimed that Uniswap let the rug pull and pump and dump happen on its platform. It highlighted that alongside the fact that Uniswap keeps a part of developer’s fees, raises a conflict of interest that has made the DEX a silent facilitator of fraud.
The more than sixty-page document concludes that Defendants have profited handsomely from this unlawful act, as have the Issuers to whom the platform paid hidden and exorbitant fees. Meanwhile, unsuspecting customers on the other side of these suspicious transactions were left holding the bag.
SEC Opened An Investigation Last Year
Uniswap came into US Securities and Exchange Commission’s eyes last year in September when the entity opened an investigation on the platform exploring how it was being used and marketed.
In late 2020, the Ripple Vs SEC case happened which is yet to conclude.
Seems like the SEC is quite alert to such cases, and it is to look forward if Uniswap faces any scrutiny by the Securities and Exchange Commission. And how the cases move forward.
Source: https://www.thecoinrepublic.com/2022/04/17/action-class-lawsuits-filed-against-uniswap-allegedly-sold-unregistered-securities/