Judge dismisses class-action suit against Uniswap over token scam losses
The United States District Court for the Southern District of New York has dismissed a class-action suit against Uniswap Labs and its CEO, foundation and venture capital backers brought by plaintiffs who claimed they lost money due to scam tokens on the decentralized cryptocurrency exchange. Judge Katherine Polk Failla, who handed down the dismissal, is also hearing the Securities and Exchange Commission’s case against Coinbase.
The suit was brought by six individuals who bought tokens on Uniswap between December 2020 and March 2022. They argued on behalf of a “nationwide class of users” that Uniswap Labs controlled liquidity pools on the protocol, including those created by the scammers they lost money to.
The suit was filed in April 2022. The defendants were demanding the recission of the (smart) contracts they entered into to buy the scam tokens, with compensation, under the Securities Act of 1933 and the Securities Exchange Act of 1934.
The plaintiffs argued that their claim was backed up by the fact that Uniswap held “liquidity provider funds and newly created tokens in Uniswap’s proprietary core contracts,” used routers it controlled to process transactions on the protocol and issued liquidity tokens when pools were created. In addition, the plaintiffs held that the defendants “likely” held at least 88% of the Uniswap (UNI) governance tokens, although they had no actual knowledge of token ownership.
Related: Binance CEO warns of phishing scams as Uniswap founder gets hacked
The judge said in her order that neither side knew the identities of the scammers, and in place of suing the scammers for unlawful solicitation, the plaintiffs were suing the defendants for statements made on social media:
“Undaunted, they now sue the Uniswap Defendants and the VC [venture capital] Defendants, hoping that this Court might overlook the fact that the current state of cryptocurrency regulation leaves them without recourse, at least as to the specific claims alleged in this suit.”
The court did not overlook that fact:
“The Court declines to stretch the federal securities laws to cover the conduct alleged, and concludes that Plaintiffs’ concerns are better addressed to Congress than to this Court.”
The judge commented in more general terms as well. Writing about the plaintiffs’ allegations concerning the core and router contracts, she said:
“[I]t defies logic that a drafter of computer code underlying a particular software platform could be liable under Section 29(b) [ of the Exchange Act] for a third-party’s misuse of that platform.”
The judge cited the unsuccessful class action brought against Coinbase in 2022 for unregulated securities sales in her reasoning. She dismissed the case with prejudice, meaning the case cannot be retried.
Community commenters noted with pleasure that the decision showed a considerable depth of understanding of decentralized finance.
Big Lesson for crypto policymakers and financial regulators (and the administrative state at large):
If you choose to avoid the legal process, if you do not want to engage in good faith rulemaking, the courts will not bail you out. https://t.co/r5RATmiwwq
— Mike Wawszczak (@mikewawszczak) August 30, 2023
Magazine: Get your money back: The weird world of crypto litigation
Lib Dems don’t tend to listen to right-wing podcasts.
But if they did, they may be heartened by some of what they hear.
Take the interview Kemi Badenoch gave to the TRIGGERnometry show in February.
Ten minutes into the episode, one of the hosts recounts a conversation with a Tory MP who said the party lost the last election to the Lib Dems because they went too far to the right.
Everyone laughs.
Then in March, in a conversation with the Canadian psychologist Jordan Peterson, the Tory leader was asked to describe a Liberal Democrat.
“Somebody who is good at fixing their church roof,” said Ms Badenoch.
She meant it as a negative.
Lib Dems now mention it every time you go near any of them with a TV camera.
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‘It’s a two-horse race!’
The pitch is clear, the stunts are naff
At times, party figures seem somewhat astonished the Tories don’t view them as more of a threat, given they were beaten by them in swathes of their traditional heartlands last year.
Going forward, the pitch is clear.
Sir Ed Davey wants to replace the Tories as the party of middle England.
Sir Ed rides on a rollercoaster. Pic: PA
One way he’s trying to do that is through somewhat naff and very much twee campaign stunts.
To open this local election race, the Lib Dem leader straddled a hobbyhorse and galloped through a blue fence.
More recently, he’s brandished a sausage, hopped aboard a rollercoaster and planted wildflowers.
Senior Lib Dems say they are “constantly asking” whether this is the correct strategy, especially given the hardship being faced by many in the country.
They maintain it is helping get their message out though, according to the evidence they have.
“I think you can take the issues that matter to voters seriously while not taking yourself too seriously, and I also think it’s a way of engaging people who are turned off by politics,” said Sir Ed.
Sir Ed on a hobby horse during the launch of the party’s local election campaign in the Walled Garden of Badgemore Park in Henley-on-Thames. Pic: PA
Pic: PA
‘What if people don’t want grown-ups?’
In that way, the Lib Dems are fishing in a similar pool of voters to Reform UK, albeit from the other side of the water’s edge.
Indeed, talk to Lib Dem MPs, and they say while some Reform supporters they meet would never vote for a party with the word “liberal” in its name, others are motivated more by generalised anger than any traditional political ideology.
These people, the MPs say, can be persuaded.
But this group also shows a broader risk to the Lib Dem approach.
Put simply, are they simply too nice for the fractured times we live in?
“The Lib Dems want to be the grown-ups in the room,” says Joe Twyman, director of Delta Poll.
“We like to think that the grown-ups in the room will be rewarded… but what if people don’t want grown-ups in the room, what if people want kids shitting on the floor.”
Sir Ed canoeing in the River Severn in Shrewsbury, Shropshire. Pic: PA
A plan that looks different to the status quo
The party’s answer to this is that they are alive to the trap Lib Dems have walked into in the past of adopting a technocratic tone and blandly telling the public every issue is a “bit more complicated” than it seems.
One senior figure says the Lib Dems are trying to do something quite unusual for a progressive centre-left party in making a broader emotional argument about why the public should pick them.
This source says that approach runs through the stunts but also through the focus on care and the party leader’s personal connection to the issue.
Presenting a plan that looks different to the status quo is another way to try to stand apart.
It’s why there has been a focus on attacking Donald Trump and talking up the EU recently, two areas left unoccupied by the main parties.
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‘A snivelling cretin’: Your response?
The focus on local campaigning
But beyond the national strategy, Lib Dems believe it’s their local campaigning that really reaps rewards.
In the run-up to the last election, several more regional press officers were recruited.
Many stories pumped out by the media office now have a focus on data that can be broken down to a constituency level and given to local news outlets.
Party sources say there has also been a concerted attempt to get away from the cliche of the Lib Dems constantly calling for parliament to be recalled.
“They beat us to it,” said one staffer of the recent recall to debate British Steel.
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Steel might have been ‘under orders’ from China
‘Gail’s bakery rule’
This focus on the local is helped by the fact many Lib Dem constituencies now look somewhat similar.
That was evidenced by the apparent “Gail’s bakery rule” last year, in which any constituency with a branch of the upmarket pastry purveyor had activists heaped on it.
The similarities have helped the Lib Dems get away from another cliche – that of the somewhat opportunist targeting of different areas with very different messages.
“There is a certain consistency in where we won that helps explain that higher vote retention,” said Lib Dem president Lord Pack.
“Look at leaflets in different constituencies [last year] and they were much more consistent than previous elections… the messages are fundamentally the same in a way that was not always the case in the past.”
Sir Ed in a swan pedalo on Bude Canal in Cornwall. Pic: PA
A bottom-up campaign machine
New MPs have also been tasked with demonstrating delivery and focusing doggedly on the issues that matter to their constituents.
One Home Counties MP says he wants to be able to send out leaflets by 2027, saying “everyone in this constituency knows someone who has been helped by their local Lib Dem”.
In the run-up to last year’s vote, strategists gave the example of the Lib Dem candidate who was invited to a local ribbon-cutting ceremony in place of the sitting Tory MP as proof of how the party can ingratiate itself into communities.
With that in mind, the aim for these local elections is to pick up councillors in the places the party now has new MPs, allowing them to dig in further and keep building a bottom-up campaign machine.
‘Anyone but Labour or Conservative’
But what of the next general election?
Senior Lib Dems are confident of holding their current 72 seats.
They also point to the fact 20 of their 27 second-place finishes currently have a Conservative MP.
Those will be the main focus, along with the 43 seats in which they finished third.
There’s also an acronym brewing to describe the approach – ABLOC or “Anyone but Labour or Conservative”.
Keir Starmer and Kemi Badenoch aren’t exactly flying high in the opinion polls
9% swing could make Sir Ed leader of the opposition
The hope is for the political forces to align and Reform UK to continue splitting the Tory vote while unpopularity with the Labour government and Conservative opposition triggers some to jump ship.
A recent pamphlet by Lord Pack showed if the Tories did not make progress against the other parties, just 25 gains from them by the Lib Dems – the equivalent of a 9% swing – would be enough to make Sir Ed leader of the opposition.
What’s more, a majority of these seats would be in the South East and South West, where the party has already picked up big wins.
As for the overall aim of all this, Lord Pack is candid the Lib Dems shouldn’t view a hung parliament as the best way to achieve the big prize of electoral reform because they almost always end badly for the smaller party.
Instead, the Lib Dem president suggests the potential fragmentation of politics could bring electoral reform closer in a more natural way.
“What percentage share of the vote is the most popular party going to get at the next general election, it’s quite plausible that that will be under 30%. Our political system can’t cope with that sort of world,” he said.
Whether Ms Badenoch will still be laughing then remains to be seen.
This is part of a series of local election previews with the five major parties. All five have been invited to take part.
Politics
PM and Trump step up trade talks – as chancellor warns it’s ‘foolish’ not to engage with China
It would be “foolish” to stop engaging with China, the chancellor has said, as Sir Keir Starmer held his first call with Donald Trump since he put 10% tariffs on goods imported from the UK.
Rachel Reeves will hold talks with the US next week amid efforts to establish a trade deal, which the government hopes will take the sting out of the president’s tariffs.
There has been speculation Washington may press the government to limit its dealings with China as part of that deal, having launched a tit-for-tat trade war with its economic rival.
But Ms Reeves told The Daily Telegraph:”China is the second-biggest economy in the world, and it would be, I think, very foolish, to not engage.
“That’s the approach of this government.”
She suggested she would back the fast fashion firm Shein launching an initial public offering (IPO) in the UK, saying the London Stock Exchange and Financial Conduct Authority have “very strict standards” and “we do want to welcome new listings”.
Shein, which was founded in China but is now based in Singapore, has faced several obstacles to its efforts to float, including UK political pressure over alleged supply chain and labour abuses.
Read more from Sky News:
Trump says he might give up on Ukraine peace talks
Pub hours extended for 80th VE Day celebrations
How Japan could shape the future of the NHS
Sir Keir Starmer and Donald Trump met in February. Pic: PA
‘Productive discussions’
When it comes to a UK-US deal, The Daily Telegraph has reported officials in Washington believe an agreement could be weeks away.
But on Thursday, Mr Trump said he was in “no rush” to reach any deals because of the revenues his new tariffs are generating.
During Sir Keir’s call with the US president on Friday, the two leaders talked about the “ongoing and productive discussions” on trade between the two nations, according to a Downing Street spokesperson.
“The prime minister reiterated his commitment to free and open trade and the importance of protecting the national interest,” Number 10 said.
As well as the 10% levy on all goods imported to America from the UK, Mr Trump enacted a 25% levy on car imports.
The health secretary is taking inspiration from Japan in his bid to change how Britons are treated by the NHS.
Wes Streeting has said he’s interested in the idea of “health MOTs” for Britain’s older citizens, evoking how the Asian island nation relies on personalised medical plans for its ageing population.
Japan combines genomics and AI machine learning to offer hyper-bespoke programmes for individuals, helping to predict and prevent illnesses before they really take hold.
Mr Streeting said such an approach could be a “game-changer” in the UK, as he prepares to publish his 10-year plan for the health service later in 2025.
He has repeatedly spoken about his desire to move more of the NHS’s work out of hospitals and into local communities, focusing more on preventative care than more expensive and invasive emergency treatment.
Last year, NHS England – which is due to be scrapped – announced patients over 65 or those with frailty-related conditions would be given health MOTs outside emergency departments to avoid unnecessary admissions.
The tests checked for blood pressure, heart health and mobility.
Read more from Sky News:
Why families face agonising funeral delays
‘Andrew Tate phenomena’ sweeping schools
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Why has Starmer axed NHS England?
‘A lot of opportunity’
Speaking to The Telegraph, the minister said Japan was an “interesting” case study to follow because it’s got a “very significant ageing society”.
Japan’s population has been shrinking and growing older for decades as young people delay marriage and having children largely due to unstable jobs and economic difficulties.
A 2023 survey found more than 1 in 10 people in Japan were aged 80 or older for the first time.
Mr Streeting has reportedly been briefed by an ex-Japanese health official about the country’s health programmes.
He told The Telegraph while the NHS faced “enormous challenges”, he believed advances in technology – notably around artificial intelligence – offered “a lot of opportunity and hope”.
He said he hoped personalised programmes like Japan’s could eventually be offered to everyone in the UK.
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