North Carolina-based Uniswap user filed a case against Uniswap crypto exchange and claimed that due to failure of security check at the exchange, huge fraudulent activities are going on.
Uniswap is a leading Decentralized crypto exchange on the Ethereum blockchain network and also supports Layer2 scaling solution network Polygon. Right now the team behind the Uniswap project is fully legal and they are working under full compliance but due to the absence of any rules and laws on the decentralized crypto exchange, manipulation and illegal activities are rapidly going on. Illegal and fraudulent activities are not only part of this decentralized exchange but also many Defi exchanges are facing such issues.
North Carolina-based Uniswap user, Nessa Risley, filed a lawsuit against Uniswap Labs. According to Nessa, Uniswap failed to register its services with the United States Securities and Exchange Commission (SEC). And also Uniswap has no provisions for its security check on users, to keep fraudsters away from the platform.
According to Plaintiff, Uniswap Labs allows fraudsters and its backer project investors to facilitate pump & dump like schemes. And this was the main reason for her and many other investors’ loss of investment in the exchange.
“Defendants are well aware of the fraud perpetrated on the Exchange, but have done nothing to stop these activities, even though they could easily do so.”
This lawsuit is not only against Uniswap lab but also against the Uniswap founder Hayden Adams, and backers Paradigm, AH Capital Management, Andreessen Horowitz, and Union Square Ventures. So maybe this may turn into some new situation, under new provisions.
Earlier in September of last year, reports & rumors were circulating in the crypto industry about the US SEC agency investigations in the working system of Uniswap exchange, on how the investors and participants play roles to make the system decentralized and ideal.