Investors accuse Uniswap Labs of violating securities laws

by in Cryptocurrency News

Uniswap

A group of US investors led by Nessa Risley filed a class-action lawsuit against Uniswap Labs. They accused the developer of the popular DEX of non-compliance with securities laws, resulting in losses.

In addition to the company, the plaintiffs also mentioned its founder Hayden Adams and investors of the Paradigm project, AH Capital Management, Andreessen Horowitz, and Union Square Ventures.

They were accused of not wanting to contribute to closing gaps in Uniswap's work for the sake of profit. According to the plaintiffs, the amount of commissions received by the protocol has now exceeded $1 billion.

Investors indicated that the scammers took advantage of the lack of KYC procedures and the defendant's registration as a broker-dealer with the SEC to implement the Pump & Dump scheme. Uniswap Labs has made little effort to prevent such practices.

The statement states that the tokens traded on the DEX are unregistered securities. With proper disclosure by the law, investors could have refrained from acquiring fraudulent assets.

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The Group expects Uniswap to acknowledge the violation of securities laws and to pay damages as determined by the court.

Uniswap Labs intends to challenge the allegations in court.

“The reasoning is unfounded, and the complaint is replete with factual inaccuracies,” its representatives explained. Recall that in August 2021, SEC Chairman Gary Gensler warned of increased regulation of DeFi and emphasized that the decentralized nature of projects does not give immunity from agency oversight.

In September, he called users of DeFi platforms “vulnerable.” Gensler stated that the segment is "rife with scams, scams, and abuse".

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Later, information appeared in the media about the SEC investigation against several companies in the segment, including Uniswap Labs.

In January 2022, Gensler announced building a regulatory framework for cryptocurrency exchanges as a priority for this year.

In February, SEC Director of Enforcement Gurbir Grewal warned that the Commission would not offer amnesty to crypto companies that self-report violations of securities laws.