Uniswap Scores Two Landmark Legal Wins
Uniswap Labs has prevailed in major U.S. legal battles, setting a huge precedent for DeFi. A federal judge dismissed a class-action lawsuit over user losses from "rug pulls," establishing that decentralized protocols aren't liable for third-party misuse. In a separate case, a court found that certain blockchain patents were ineligible, shielding DeFi from future patent trolling.
The class-action lawsuit against Uniswap was first filed in April 2022, led by plaintiff Nessa Risley. The suit alleged that Uniswap, along with its founder Hayden Adams and several venture capital backers like Paradigm and Andreessen Horowitz, were responsible for losses from scam tokens traded on the platform. U.S. District Judge Katherine Polk Failla of the Southern District of New York dismissed the final claims with prejudice, meaning the plaintiffs cannot refile the case. The judge reasoned that simply creating a venue for trading is not the same as substantially assisting in fraud, comparing it to a bank not being liable for money laundering through its accounts or WhatsApp's liability for illicit deals coordinated on its service. This ruling reinforces the idea that developers of open-source, decentralized protocols are not responsible for how third parties misuse the technology. The court noted that due to the decentralized nature of the protocol, the identities of the actual scam token issuers were "basically unknown and unknowable," leaving the plaintiffs with an injury but no identifiable defendant to sue. In the separate patent dispute, Bprotocol Foundation and LocalCoin Ltd., entities affiliated with the DeFi protocol Bancor, sued Uniswap in May 2025. They claimed Uniswap's automated market maker (AMM) technology infringed on patents they filed in 2017 for a "constant product automated market maker" (CPAMM). Judge John G. Koeltl, also in the Southern District of New York, dismissed the case, ruling that the patents were directed at an abstract idea—calculating currency exchange rates—which is a "fundamental economic practice" and not eligible for patent protection. The court found the patents simply used existing blockchain technology in predictable ways and did not offer a new technical solution. This patent decision was dismissed without prejudice, giving the Bancor-affiliated entities 21 days to file an amended complaint. The ruling is seen as a significant check on the ability to patent foundational DeFi concepts, particularly those based on mathematical formulas, thereby supporting open-source development in the sector.
