Original | Odaily Planet Daily (@OdailyChina)
Author | jk
On March 3, 2026, U.S. District Judge Katherine Polk Failla of the Southern District of New York formally dismissed the second amended class action lawsuit against Uniswap Labs and its founder Hayden Adams with prejudice, meaning plaintiffs may not refile the same claims. This marks the end of a legal battle that began in 2022.
Case origin: Victims of the scam token cannot locate the defendant
In April 2022, a group of investors led by Nessa Risley filed a class-action lawsuit in court. They claimed to have suffered losses while trading tokens on the Uniswap protocol—tokens involved in classic crypto scams such as rug pulls and pump-and-dump schemes, in which project teams artificially inflate prices over a short period before selling off, leaving retail investors with worthless assets.
The problem is that the issuers of these scam tokens are mostly anonymous and cannot be held accountable. As a result, investors have turned their attention to the targets they can reach: Uniswap Labs, founder Adams, the Uniswap Foundation, and three prominent venture capital firms: Paradigm, Andreessen Horowitz (a16z), and Union Square Ventures.
The plaintiff's core argument is that Uniswap provides a marketplace that facilitates matching buyers and sellers, thereby enabling fraud and should be held jointly liable.
Three-year battle: Federal claims dismissed first, then state law claims also failed
The litigation proceeds in two stages.
In Phase One (2023), the court dismissed all of the plaintiff’s claims under federal securities law, ruling that the plaintiff failed to demonstrate that Uniswap operated as an unregistered securities exchange or broker. The judge wrote in this ruling a statement that was later widely cited: it “defies logic” to hold the writers of smart contracts responsible for third-party abuses of a decentralized platform. In February 2025, the U.S. Court of Appeals for the Second Circuit upheld this ruling but remanded the remaining state-law claims back to the district court for further proceedings.
Phase Two (March 2026): The plaintiff adjusted their strategy, focusing in the second amended complaint on six state-law claims, including aiding and abetting fraud, aiding and abetting negligent misrepresentation, violations of consumer protection laws in New York, North Carolina, and Idaho, and unjust enrichment. However, all six claims were again dismissed.
The court ruled:
- The plaintiff failed to prove that Uniswap Labs had actual knowledge of the specific fraudulent activities at the time they occurred: users' complaint emails were received only after the purchases were made, and social media warnings were directed at other investors, not at the defendant;
- Uniswap Labs never activated the protocol fee switch during the period in question and did not directly profit from trades, so there can be no claim of unjust enrichment;
- In 2020, Uniswap publicly published a blog post acknowledging the growing difficulty of distinguishing between scam tokens and legitimate tokens, and its terms of service included relevant disclosures, all of which constituted public warnings to users rather than deception.
Ruling: Providing infrastructure does not equate to actively assisting fraud
Judge Failla explicitly stated in the ruling that the plaintiffs' theory of liability has always rested on the premise that Uniswap "facilitated" fraudulent transactions by providing a market. However, the court did not accept this logic.
The ruling states: "Merely creating an environment in which fraud could occur is not equivalent to actively assisting fraud." Developers writing open-source smart contract code and deploying it on a decentralized network, where anyone can freely use it, differs fundamentally from the role of traditional financial intermediaries that control users' assets and review transactions.
Brian Nistler, Head of Legal at Uniswap Labs, called the ruling another "landmark" decision for DeFi on X. Adams himself posted briefly: "If scam artists exploit open-source smart contract code, the responsibility lies with the scammers, not the developers who wrote the code. This is a good, reasonable outcome."
Subsequent impact: Legal shield for DeFi protocols and Launchpads
The impact of this ruling extends far beyond Uniswap alone.
In the cryptocurrency industry, numerous DeFi protocols and launchpads have long faced similar potential legal risks: users who suffer losses after trading scam projects on the protocol turn around to sue the protocol itself. This ruling establishes a key legal principle: as long as the protocol developers are not active architects of the fraud and cannot be proven to have had actual knowledge of the specific scam or provided substantial assistance, the platform is not liable for third-party fraud.
Lending protocols such as Aave and Compound, liquidity platforms like Curve Finance, and various token issuance and trading launchpads all rely on open-source, permissionless architectures similar to Uniswap. If the court were to take the opposite stance—equating code deployment with acting as a broker—the entire DeFi industry would face a fundamental legal existential crisis. This ruling significantly reduces that risk.
However, legal experts have cautioned against excessive optimism. Judge Fila herself acknowledged in her ruling that the plaintiffs' injuries were "real and palpable," but the current legal system cannot hold protocol developers accountable. She explicitly stated that policy-related issues fall within the purview of Congress, not the judiciary. This means that if Congress enacts legislation in the future specifically regulating DeFi platform liability, the protective effect of this precedent will no longer apply.
In addition, the development of the Tornado Cash criminal case, which also involves responsibility for open-source code, will remain an important reference point for the industry.
In terms of market sentiment, following the announcement of the ruling, Uniswap's native token UNI rose approximately 6% on the day, reaching as high as $3.97.