‘Good, Sensible Outcome’ — Judge Dismisses Class Action Against Uniswap Labs in New York

Following remand, plaintiffs refashioned their complaint, focusing on aiding and abetting fraud, negligent misrepresentation, violations of consumer protection statutes in New York, North Carolina, and Idaho, and unjust enrichment. On Monday, Failla dismissed those claims with prejudice, finding the amended complaint still failed to plausibly allege liability.

“Despite three chances to get it right, Plaintiffs remain unable to allege plausible claims,” Judge Failla’s ruling states.

Central to the court’s reasoning was the absence of actual knowledge. To state an aiding-and-abetting fraud claim under New York law, plaintiffs had to show the defendants had actual knowledge of the underlying fraud and provided substantial assistance. The court found neither.

Allegations that Uniswap received complaints after losses occurred did not establish contemporaneous knowledge. General warnings on social media about scam tokens were insufficient. Even a March 2022 study alleging high rates of fraudulent token launches did not demonstrate that Uniswap knew about the specific tokens at issue during the relevant period.

The court also rejected the argument that merely providing a platform constituted “substantial assistance.” Drawing comparisons to traditional exchanges and financial institutions, Failla wrote that creating access to a marketplace — even one where bad actors operate — does not equate to participating in fraud. The identities of the token issuers remained unknown, and the complaint repeatedly acknowledged that the issuers’ own misrepresentations caused the losses.

Consumer protection claims fared no better. The court found no materially misleading statements by Uniswap Labs and noted that public blog posts and terms of service warned users about the risks of scam tokens. The alleged omissions were not information uniquely held by the company and unavailable to users.

As for unjust enrichment, plaintiffs failed to plausibly allege that Uniswap Labs directly profited from the transactions at issue during the class period. The protocol’s optional fee switch was never activated, and an interface fee implemented in October 2023 fell outside the relevant timeframe.

For now, the ruling stands as a clear statement from a New York federal court: designing decentralized infrastructure is not, by itself, the same as orchestrating fraud. Whether plaintiffs pursue another appeal remains to be seen, but after multiple rounds of amendments and appellate review, the legal runway appears short.