The United States Court of Appeals for the Second Circuit issued a ruling on Wednesday, agreeing largely with the 2023 decision of a lower court to rule out a collective claim against Uniswap decentralized exchange.
A group of investors originally demanded Uniswap Labs, the company behind the decentralized protocol of the same name, and some of its risk capital investors in 2022, claiming that the company was responsible for damaging investors by allowing tokens to be issued scams in their protocol.
The Judge of the Katherine Polk Failla District Court of the Southern District of New York (SDNY) was put on the side of UNISWAP in 2023 and discarded the lawsuit before it was in trial, comparing the arguments of the plaintiffs to “a lawsuit that tries to make a request as venmo or zelle responsible for a drug agreement that the platform used to facilitate a transfer of funds.”
The plaintiffs appealed the decision of Failla in September 2023, but were largely closed by the new decision of the second circuit on Wednesday. The judges of the second circuit affirmed Failla’s decision to eliminate the claims of the plaintiffs under the Law of Securities and the Exchange Law, write:
“In summary, we agree with the District Court in which ‘it challenges the logic’ that a editor of an intelligent contract, a computer code, could be responsible for the exchange law for the misuse of the platform of a third of the user,” reads the presentation.
The only part of the failed ruling that was unemployed and sent to a district court, which means that the lower court will listen to this splinter of the plaintiffs again, were the claims of state law, which essentially seek to prove similar accusations under the State, instead of the federal law, in New York, North Carolina and Idaho.
The ruling is a victory for UNISWAP, just out of Tuesday’s announcement that the United States Stock Exchange and Securities Commission (SEC) would eliminate its research on the decentralized exchange that, under the former president of the SEC, Gary Gensler, was being investigated for allegedly operating as an unregistered stock corridor and an exchange of unregistered values, as well as an exchange of non -registered securities, as well as an unregistered security.
Read more: the SEC leaves an investigation on UNISWAP, it will not present the application action
