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Trader Files Lawsuit Against Uniswap After Significant Losses

Nessa Risley has issued a class action lawsuit against Uniswap and its associates for illegally promoting and selling unregistered assets. Furthermore, the Uniswap user claims the decentralized exchange has no KYC process, hence resulting in massive fraud.

Before the Suit

Between May and July 2021, the plaintiff supposedly purchased several microcap altcoins worth around $10,000 on the DEX. Risley stated that traded on Uniswap for the first time in May, which resulted in significant losses. Other defendants in the complaint include Uniswap founder Hayden Adams and investment companies Andreessen Horowitz, Paradigm, and Union Square Ventures.

Prior to the case, two legal firms persuaded Uniswap victims to pursue a class action complaint against the DEX backers. They argued that the exchange did not put a halt to the rising number of fraudulent activities on the platform. Likewise, US firms, Kim & Serritella LLP and Barton LLP, claimed that the defendants permitted illegal actions such as rug pulls.

Additionally, the trial alleges that the defendants failed to furnish investors with written reports on the instruments they were selling. Another major complaint was that the appellants encouraged such illegal behavior since Uniswap collected fees for the developers. Risley claims losses in EthereumMax, Bezoge Earth, Matrix Samurai, Rocket Bunny, BoomBaby tokens, and Alphawolf Finance.

Crypto Lawsuits on the Rise

This is not the first legal action against a DeFi outfit, and certainly not the only in past weeks against a crypto outfit.

Only last week, an aggrieved plaintiff, Eric De Ford, filed a class action suit against Let’s-Go-Brandon coin creators. Ford accused the memecoin developers of price manipulation and deceit. Last September, less severe claims sparked an investigation into Uniswap Labs by the SEC. However, the probe found no proof of wrongdoing. There has been no reported investigation into LGB coin creators.

Similarly, early this year, software engineer Joseph Kent filed a lawsuit in January against DeFi protocol PoolTogether, alleging that it operates illegally under New York law. Plaintiff Mr. Kent filed the complaint after depositing $10 in cryptocurrencies in PoolTogether in October 2021. He contended that the lottery existed in a legal grey area.

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In certain circles, the thinly-regulated DeFi space continues to polarise opinions. In January, longtime crypto critic Senator Warren, remarked that the DeFi space could be the “most dangerous” aspect of crypto. 

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