A federal judge in Manhattan dismissed with prejudice all remaining claims against Uniswap Labs and CEO Hayden Adams on March 2, 2026, delivering a decisive legal win for decentralized finance (DeFi) developers accused of facilitating crypto scams. The class action, known as Risley v. Universal Navigation Inc., sought to hold protocol creators liable for investor losses from rug pulls and pump-and-dump schemes executed by anonymous third parties.
Case Background: Nearly Four-Year Legal Battle
The lawsuit was filed in April 2022 by lead plaintiff Nessa Risley and others who alleged they lost money trading 38 fraudulent tokens via Uniswap’s web interface between April 5, 2021, and April 4, 2022. Plaintiffs argued that by designing, promoting, and collecting fees from the decentralized exchange, Uniswap Labs effectively facilitated unregistered securities sales and widespread fraud. Federal securities claims were dismissed in August 2023, and the Second Circuit affirmed that dismissal in February 2025, but remanded state-law claims for reconsideration.
Court Ruling: No Knowledge, No Substantial Assistance
On remand, plaintiffs refocused on aiding-and-abetting fraud, negligent misrepresentation, consumer protection violations, and unjust enrichment. Judge Katherine Polk Failla dismissed all claims with prejudice, noting that “despite three chances to get it right, Plaintiffs remain unable to allege plausible claims.” To establish aiding-and-abetting fraud under New York law, plaintiffs needed to show actual knowledge of the underlying fraud and substantial assistance. The court found neither: general complaints about scam tokens, a March 2022 study on fraudulent launches, and social media warnings did not prove contemporaneous knowledge of the specific tokens at issue. Moreover, merely providing a platform does not constitute “substantial assistance.” The judge drew parallels to traditional exchanges, stating that creating marketplace access — even where bad actors operate — does not equate to participating in fraud.
Consumer protection claims also failed, as Uniswap’s public blog posts and terms of service warned users about scam token risks. On unjust enrichment, plaintiffs could not show that Uniswap directly profited from the disputed transactions during the class period: the optional fee switch was never activated, and an interface fee introduced in October 2023 fell outside the relevant timeframe.
Industry Reaction: Protecting Innovation
“If you write open source smart contract code, and the code is used by scammers, the scammers are liable, not the open source devs. Good, sensible outcome,” wrote Adams on X. Brian Nistler, General Counsel of the Uniswap Foundation, said, “Another day, another precedent-setting ruling for DeFi.” The decision reinforces judicial limits on holding open-source protocol developers liable, leaving broader regulatory changes to Congress. Whether plaintiffs will appeal remains unclear, but the legal pathway appears narrow after multiple amendments and appellate review.