American woman sues Uniswap over lack of consumer protection


Nessa Risley of North Carolina is suing Uniswap Labs and investors in decentralized exchange Uniswap for violating US securities laws.

In her lawsuit, Nessa Risley highlights Uniswap’s lack of customer identification procedures and lack of a broker-dealer license from the US Securities and Exchange Commission (SEC). According to her, this allows fraudsters to use “pump-and-dump” schemes on the exchange, which leads to the loss of funds by “honest traders”. And in the lawsuit, she accuses Uniswap Labs of not opposing the schemes.

Also in his lawsuit, Risley claims that tokens traded on Uniswap should be treated as unregistered securities, which means that the exchange should be subject to US securities laws. This would allow her and other traders to avoid losing funds on crypto assets such as EthereumMax, Bezoge Earth, Matrix Samurai, Alphawolf Finance, Rocket Bunny and BoomBaby.io.

The document highlights that Uniswap founder Hayden Adams and venture capital firms Paradigm, AH Capital Management, Andreessen Horowitz and Union Square Ventures, who invested in the decentralized exchange, indirectly profited from the actions of fraudsters.

“The defendants are well aware that fraudsters use the exchange, but did nothing to prevent this activity, although they could. Instead, they encouraged fraudulent activities by promising to pay transaction fees to token issuers,” notes Risley.

Uniswap Labs does manage the Uniswap protocol. However, while decentralized exchanges are not in the field of view of regulators, it is not clear what responsibility the company can bear.

Recall that earlier the Uniswap exchange announced the launch of a new venture division that will invest in Web3 projects and protocols.

Source: Bits

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