Uniswap Wins Legal Battle as U.S. Federal Judge Dismisses Crypto Rug-Pull Lawsuit

• Uniswap is not liable for alleged rug pulls by third-party token issuers, Judge Katherine Polk Failla ruled.
• The dismissal follows a victory in a patent infringement case, strengthening Uniswap’s legal standing.

Uniswap Labs and its founder, Hayden Adams, saw a significant legal victory when a US federal judge dismissed a four-year-old class-action complaint seeking to hold the decentralized exchange accountable for rug pull and pump-and-dump fraud on its platform.

The decision was delivered by Judge Katherine Polk Failla in Manhattan on March 2, ruling that Uniswap cannot be held responsible for the actions of anonymous token issuers and that operating as a decentralized platform providing an open‑source trading environment does not constitute assisting fraud.

Federal Court Backs DeFi Infrastructure

Nessa Risley led the plaintiffs and filed the first lawsuit against Hayden Adams and Uniswap in April 2022. The lawsuit was dismissed in August 2023 and upheld on appeal.  Again, the plaintiffs refiled in May; this time, they switched to state consumer protection concerns and claimed that the platform permitted pump-and-dump schemes and rug pulls. 

The court upheld the legal safeguards for open-source DeFi platforms by rejecting the arguments once more.

Then, Brian, policy and legal lead at Uniswap Labs, said the ruling marks “another precedent-setting win for DeFi,” He stressed that even though the plaintiffs switched to state-level claims, the court once more determined that Uniswap cannot be held accountable for stated scams carried out by anonymous third-party token issuers, adding that it “defies logic” to hold a smart contract developer accountable for how others abuse the protocol.

As this decision marks Uniswap’s another major courtroom victory, as in February, Bancor-affiliated entities filed a patent infringement lawsuit against the exchange, which was dismissed by a New York federal judge, ruling that the patents at issue were based on abstract ideas and therefore not eligible for protection under U.S. patent law.

Following the ruling and continued legal wins, UNI is trading up about 1.5%, at $3.86, with a total market cap of $2.45 billion. Also, the  24-hour trading volume climbed over 23%, which signals increased market activity.

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