A federal judge in New York has dismissed the remaining state law claims against Uniswap Labs and founder Hayden Adams, bringing a class action first filed in 2022 to an end. Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York threw out the claims with prejudice, which means the plaintiffs cannot bring the same case again in that court. The lawsuit had tried to hold Uniswap responsible for scam tokens traded through its protocol.
Court rejects attempt to link protocol design to third-party fraud
Investors argued that Uniswap helped connect buyers and sellers of fraudulent tokens and should therefore bear responsibility for losses tied to rug pulls and pump-and-dump schemes. The court did not accept that theory. It ruled that operating a decentralized marketplace does not amount to substantial assistance of fraud, and that developers cannot be held liable simply because other parties misuse open-source code. The line was drawn plainly.
This was not the first setback for the plaintiffs. In 2023, the federal securities claims in the case were already dismissed. The Second Circuit later affirmed that outcome and sent the remaining state law claims back for review. Monday’s ruling resolved that last portion and closed the case.
Judge says plaintiffs did not plausibly show actual knowledge
The decision also said the plaintiffs failed to plausibly allege actual knowledge of fraud. It rejected claims brought under state consumer protection laws and dismissed allegations of unjust enrichment as well. For DeFi projects, the ruling sharpens a legal distinction between neutral technology providers and the actors who issue fraudulent tokens.
On X, Uniswap Labs General Counsel Brian Nistler called the decision another precedent-setting result for decentralized finance, saying courts have consistently refused to place liability on developers for third-party misuse of open-source software. In a separate post, Hayden Adams said that if scammers exploit open-source smart contracts, the scammers remain liable, not the developers, and described the ruling as a “good and sensible outcome.”
UNI climbs to $3.92 after the ruling
After the decision, UNI rose 6% to $3.92, adding to gains during a broader crypto market rally. The move suggested that traders saw the dismissal as easing legal uncertainty around the protocol. For projects built on similar models, the ruling may offer stronger footing when claims are tied to misconduct by third parties rather than the developers who published the code.