A New York court has dismissed a proposed class action lawsuit against decentralized crypto exchange Uniswap while classifying two major cryptocurrencies, Ethereum (ETH) and Bitcoin, as commodities. The lawsuit, filed in April 2022, claimed that Uniswap violated U.S. securities laws by operating as an unregistered exchange and offering securities without proper registration.
The court ruling stated that the issuers of the “scam tokens” traded on the platform, including Ethereum-based tokens such as EthereumMax (EMAX), Bezoge (BEZOGE), and Alphawolf Finance (AWF), were the true defendants in the case, rather than Uniswap.
Significantly, despite SEC Chief Gary Gensler refraining from categorizing ETH as a security, Judge Katherine Polk Failla of the Southern District of New York explicitly classified it as a commodity. The judge declined to extend federal securities laws to cover the allegations against Uniswap, noting that the smart contracts within the decentralized protocol were able to be lawfully carried out in the exchange of crypto commodities ETH and Bitcoin.
This court ruling holds importance as it classifies Ethereum and Bitcoin as commodities and highlights the distinction between the responsibilities of decentralized protocols and the issuers of tokens traded on them.