Class action files lawsuit against Uniswap Labs for breaching security laws 

A new class-action complaint filed by a Uniswap user claims that Uniswap Labs and its investors are responsible for her losses as a result of a breach of securities laws.

Pump and dump

Risley claims that she and others have lost money as a result of these actors, and she accuses Uniswap Labs of doing little to combat fraud.

Scammers used the Uniswap protocol to execute pump and dump schemes, according to Nessa Risley of North Carolina, who claims that a lack of know-your-customer due diligence and failure to register with the Securities and Exchange Commission as a broker-dealer (SEC).

Plaintiff Risley contends that the tokens sold on Uniswap are unregistered securities and that Uniswap Labs’ failure to register as a broker-dealer with the Securities and Exchange Commission (SEC) and follow securities laws puts investors at risk.

Risley claims that if she had had access to securities law-compliant information, she and other investors could have avoided some of the consequences in token marketplaces such as EthereumMax,  Rocket Bunny, Bezoge Earth, Matrix Samurai, Alphawolf Finance, and BoomBaby.io. 

A lack of KYC or other identification checks, according to the complaint, “has led to rampant fraud on the exchange.”

Complaint names Uniswap Labs founder Hayden Adams …

The legal organization that operates the decentralized Uniswap protocol is Uniswap Labs, but authorities have yet to properly hash out how to oversee decentralized exchanges, so it’s unclear what regulatory constraints entities like Uniswap Labs are.

Regulators, on the other hand, maybe look into this. The SEC was reportedly examining Uniswap Labs in September, requesting information on how investors utilize the Uniswap protocol and how Uniswap Labs markets the platform.

The complaint also names Uniswap Labs founder Hayden Adams, as well as backers Paradigm, AH Capital Management, Andreessen Horowitz, and Union Square Ventures, as well as Uniswap Labs.

Uniswap Labs will fight the case

“These charges are without merit, and the complaint is troubled with factual mistakes,” says the attorney general “Uniswap Labs’ representative confirmed this. “This suit will be forcefully defended by us.”

Risley is seeking a declaration that Uniswap has broken federal securities laws, as well as damages, disgorgement, and interest, all of which will be determined at trial.

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Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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