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In a brand new court docket ruling, a federal choose has dismissed a category motion lawsuit filed towards main decentralized cryptocurrency alternate Uniswap. The choose’s opinion underscores the difficulties of regulating decentralized finance (DeFi) protocols.
Mike Wawszczak, a Twitter consumer, highlighted choose passages from the ruling on Twitter this week. In dismissing the case, the choose acknowledged that resulting from Uniswap’s decentralized nature, there’s “no identifiable defendant” that may be held liable.
The choose additional added that the present state of cryptocurrency regulation leaves aggrieved events with out authorized recourse when coping with decentralized protocols like Uniswap.
Decide pushed towards SEC’s method
Wawszczak famous the ruling comprises highly effective language pushing again towards the SEC’s expansive method to crypto regulation.
For instance, the choose wrote, “It defies logic {that a} drafter of laptop code underlying a specific software program platform could possibly be liable underneath Part 29(b) for a third-party’s misuse of that platform.”
The choose additionally discovered that when customers deposit tokens right into a DeFi protocol like Uniswap, possession of the tokens doesn’t switch to the builders or token holders working the protocol.
The dismissal represents a major authorized win for the DeFi area, which has confronted rising regulatory stress. By recognizing the inherent difficulties in imposing rules designed for centralized entities on decentralized protocols, the ruling might affect future policymaking and enforcement actions.
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