- Class action lawsuit against Uniswap dismissed after no merit obtained.
- Assessment of the impact of the lawsuit on Uniswap’s business.
The crypto world, and more specifically DeFi, has secured another legal victory barely 24 hours after Grayscale’s victory against the SEC. This time Uniswap [UNI] made headlines after a judge dismissed a class action lawsuit against the decentralized exchange.
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Six people who purchased tokens through Uniswap filed a class action lawsuit against Uniswap in April 2023. They demanded compensation for the losses incurred for allegedly buying scam tokens. However, the New York District Judge presiding over the case dismissed the lawsuit on the grounds that Uniswap is not responsible for illegal transactions.
The same judge who will hear the Coinbase case just threw a frivolous Uniswap case out of her courtroom. The administrative state will continue to take L’s. pic.twitter.com/u9RCXAd2uB
— Ryan Selkis ???? (@twobitidiot) August 30, 2023
Essentially, Uniswap’s victory was based on the argument that there are bad actors in traditional finance. However, their actions do not necessarily affect the service provider. Despite the ruling, it is clear that scam tokens pose a threat to decentralized exchanges. Fortunately, several crypto protocols have explored more secure approaches to token listing to overcome such challenges.
Despite being a slap on the shoulder for Uniswap, the lawsuit had little impact on DEX’s business. Nevertheless, Uniswap’s on-chain activity has slowed significantly in recent months, especially from May highs to recent lows.
This was especially evident in the number of transactions and active addresses of Uniswap, which fluctuated around the lowest level so far this year.
Source: CryptoQuant
Despite the class action lawsuit, it has been business as usual for Uniswap. This was largely because the lawsuit was not large enough to threaten its operations, as well as the major changes to Uniswap’s UNI token.
The crypto market has been quite sensitive to legal decisions lately and that was evident in the situation of XRP and the grayscale. However, UNI’s situation turned out to be very different. The announcement did not significantly change demand dynamics. In other words, the recent court ruling did not cause any significant excitement in the market.
How much are 1,10,100 UNIs worth today?
UNI switched hands at $4.64 at the time of writing, having given up some recent gains. The cryptocurrency started the week with a bullish attempt to exit its recent bottom range.
However, the pullback over the past 24 hours indicated that the market was not exactly ready to recover. This was largely due to several concerns that economic conditions could lead to more downside impacts in the coming weeks. Hence the low bullish demand.