United States District Court Judge Katherine Polk Failla has dismissed the class action suit against the decentralized exchange Uniswap, calling ETH a commodity in the dismissal order.
Judge Katherine is also the Judge overseeing the United States Securities and Exchange Lawsuit against Coinbase.
ETH A Commodity According To Judge Failla
The lawsuit against Uniswap was brought by users of the decentralized exchange who claimed that they lost significant sums of money due to scam tokens being listed on the exchange. The six individuals who filed the suit had bought tokens on the decentralized exchange between December 2020 and March 2022. They told the court they were arguing on behalf of a “nationwide class of users” that Uniswap controlled liquidity pools on the protocol. They alleged that the decentralized exchange also controlled the pools created by scammers to whom they lost their money to.
In her dismissal order, the Judge wrote that Bitcoin (BTC) and Ether (ETH) were considered as “crypto commodities.” The Judge also made the distinction as part of her reasoning behind dismissing the lawsuit, stating that she was not convinced by the argument that Uniswap’s token sales were subject to the Exchange Act. Users on social media platform X, with Bill Hughes, a lawyer at ConsenSys, stating,
“The SDNY (Failla, J.) also explicitly found in its August 29 decision in Risely v. Uniswap that Ethereum is a commodity, not a security. No analysis of the issue, just the conclusion, but still, pretty definitive statement if you ask me.”
Judge Failla is also overseeing the lawsuit against Coinbase, filed by the United States Securities and Exchange Commission. She is highly experienced in crypto cases, having overseen several in the past. This includes a class action lawsuit involving Tether and Bitfinex. Judge Failla wrote in her dismissal order,
“This case is more like an effort to hold a developer of self-driving cars liable for a third party’s use of the car to commit a traffic violation or to rob a bank.”
Uniswap is a decentralized protocol, which means it cannot control which tokens are listed on the platform or who interacts with it.
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Author: Amara Khatri
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