Original Author: Eric, Foresight News
At 3 a.m. Beijing time on March 3, a class action lawsuit demanding that Uniswap and its founder Hayden Adams be held responsible for scam tokens on Uniswap was dismissed by the U.S. District Court for the Southern District of New York. Brian Nistler, General Counsel of the Uniswap Foundation, called it a "landmark ruling for DeFi."
Hayden Adams also tweeted, "If you write open-source smart contract code and that code is used by scammers, the scammers are responsible, not the open-source developer. This is a reasonable and just outcome."
For Web3 developers, this is undoubtedly good news. But what is less known is that the judge who made this "just ruling" is the same person who, during the tenure of the former SEC chairman, found the developers of the mixer Tornado Cash guilty.
The Finalized Verdict
Nearly four years have passed since the class action lawsuit against Uniswap was filed and today's final resolution.
In April 2022, Uniswap users, represented by Nessa Risley, filed a class action lawsuit in court, accusing defendants including Paradigm, a16z, Uniswap, and its founder Hayden Adams of violating federal securities laws by issuing and selling unregistered securities, including UNI, in the form of tokens on Uniswap. The defendants were accused of failing to register Uniswap as an exchange or broker-dealer under applicable securities laws and failing to provide investors with registration statements for the securities they issued and sold.
This lawsuit was initiated by the law firms Kim&Serritella and Barton, representing users who traded EtherumMax, Bezoge, MatrixSamurai, Alphawolf Finance, RocketBunny, and BoomBaby.io tokens on Uniswap between April 5, 2021, and April 4, 2022.
The phrase "unregistered securities" had extraordinary destructive power for the crypto industry at the time, but this lawsuit unexpectedly quickly tilted in Uniswap's favor.
Presiding Judge Katherine Polk Failla, while agreeing that the so-called "scam tokens" were indeed securities, ruled that Uniswap did not need to be held responsible for them. Failla believed that the decentralized nature of Uniswap meant the protocol had no control over which tokens were listed on the platform or who could interact with it. "The case is more like holding the developer of a self-driving car responsible for traffic violations or bank robberies committed by third parties using the car."
Based on this, Failla dismissed the federal securities law charges in August 2023. The plaintiffs then appealed, and the Second Circuit Court of Appeals affirmed the dismissal of the federal part in 2025 but remanded the state law part for retrial.
Subsequently, the plaintiffs amended their complaint and sued again. This time, the investors who lost money accused Uniswap and other defendants of aiding and abetting fraud and misrepresentation, profiting from transactions involving scam tokens, and violating fraud laws in multiple states.
After another review by the same judge, Failla, the amended claims were dismissed again, with no further amendments allowed, bringing the case to a complete end.
The judge's reasoning this time was largely the same as before: Uniswap was not aware of the scam tokens, and even if it were, it did not provide substantial assistance. It also did not meet the definition of fraudulent behavior under any state law. Regarding unjust enrichment, Uniswap did not obtain direct benefits, and the speculative indirect benefits from such scam projects expanding the user base were too tenuous.
In a tweet, Brian Nistler stated, quoting a sentence from the previous ruling, that it "defies logic" to hold the drafters of smart contracts responsible for the abusive behavior of third-party users on the platform.
The Different Outcome for Tornado Cash
Facing the same judge, Roman Storm of Tornado Cash met a different fate.
Tornado Cash was first added to the sanctions list by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on August 8, 2022, accused of helping criminals, including North Korean hackers, launder over $7 billion. Two days after being added to the sanctions list, Dutch police arrested Alexey Pertsev, one of the core developers of Tornado Cash.
On May 14, 2024, a Dutch court found Alexey Pertsev guilty of money laundering and sentenced him to 64 months in prison. The court believed that Pertsev was aware that the platform he developed and operated was used for crime but did not stop it, subjectively acquiescing to Tornado Cash being used as a money laundering tool. Alexey Pertsev is still appealing, but there have been no recent developments.
Seven months before Alexey Pertsev was found guilty, the U.S. Department of Justice sued two other developers, Roman Storm and Roman Semenov, in the Southern District of New York. Roman Storm was previously arrested in Washington State, while Roman Semenov remains at large.
Roman Storm in court
Although an appeal later determined that OFAC's sanctions against Tornado Cash were an overreach and invalid, Roman Storm still found himself in the defendant's seat last July. After a trial presided over by Judge Katherine Polk Failla, the jury found Roman Storm guilty of "conspiracy to operate an unlicensed money transmitting business," but no formal sentencing has been announced yet.
Under Brian Nistler's tweet celebrating Uniswap's victory, a comment by Sigil developer tim-clancy.eth criticizing Failla's contradictory rulings (the verdict against Roman Storm was actually made by a jury) received the most likes among all comments.
Decentralization Is Allowed, but Privacy Is Not
I am not a professional lawyer, but putting aside political factors and from a simple emotional perspective, I can roughly understand why Uniswap and Tornado Cash had different outcomes.
The core reason is that Tornado Cash's developers should have been well aware that a mixer would inevitably be used for money laundering. This clearly reveals the regulatory attitude: decentralization is acceptable, but it must be traceable. Tether once faced the same dilemma, so it later began cooperating with money laundering investigations and added freezing functionality.
Perhaps Roman Storm, behind bars, would feel unjust upon learning of today's verdict, but he should realize that even in a crypto-friendly U.S. under Trump, platforms helping North Korean state-level hackers launder money cannot be tolerated. With the current strength of Crypto, it is still not enough to对抗 national power.
Web3 practitioners sympathize with Tornado Cash's developers and cheer for Uniswap's victory. In our eyes, the two protocols are not fundamentally different; in fact, Tornado Cash is even superior in privacy protection. Uniswap's addition of front-end blocking of sanctioned addresses in 2022 once sparked some debate. Now, it seems that permissionlessness within the existing legal framework may be the only way for decentralized protocols to survive.
But that said, did Uniswap really have no responsibility at all in these scam incidents?
Strictly logically speaking, as the judge's analogy suggests, you cannot hold Mercedes responsible for a bank's losses just because a robber used a Mercedes to rob the bank. But on a commercial level, we tend to believe that giants should provide protection within their capabilities. Current security tools can already identify a large number of potential scam projects in advance. For these established projects that have benefited greatly from Web3's development, simple screening is not troublesome.
Doing their part to protect investors is not a mandatory obligation, but it is a responsibility that ordinary investors hope Uniswap and others will actively shoulder.
