Sep 1, 2023

A New York court is classifying ether and bitcoin as "commodities" while dismissing a proposed class action lawsuit against Uniswap filed by a group of investors in April 2022.

Video transcript

New York court is classifying Ether and Bitcoin as commodities while dismissing a proposed class action lawsuit against Unice. Uh talk to me about what happened there. Yeah. So this was, you know, as you said, a proposed class action lawsuit against Un Swap where the plaintiffs alleged that the Un UN swap, you know, front end and platform were basically uh enabling scammers to launch Tokens the judge in the case. Uh Judge Catherine Propria who by the way is also overseeing cases like SE CV coin based uh ruled that UN IWA was not the uh proper defendant in the case saying that it was just a platform that people were using. Um what was really interesting is that she went, you know, really, uh I don't say further because that has like, you know, a connotation that she went beyond the case. But um she went further than just denying the specific, you know, lawsuit. She said that, you know, this is a area where, you know, right now federal securities laws do not uh really stretch to meet, uh you know, classifying uh things like Uni swap as a securities, you know, platform or treating a lot of cryptocurrencies as securities and told the plaintiffs that they really need to be talking to Congress about updating the laws rather than, uh you know, the courts for trying to put specific, you know, boundaries on this. You brought up that the judge is the same judge that's overseeing the S ECs EC versus coin based case. Uh What effect if any could the decision here have on that case? You know, obviously it's going to be, um, you know, the argument now will be uh a platform that is listing and trading cryptocurrencies isn't necessarily going to be liable for, you know, for scams. Now, here's the thing, the sec case against point based doesn't actually like that. Any of them are scamming. I think it's just pure securities law violations. So, um the other thing there is, uh you know, is probably going to argue that uh these tokens are, you know, not necessarily securities or that the securities laws don't really fit the definition of those tokens that we've seen. Um I imagine that, you know, we'll also probably see more insight as the judge starts ruling on things like motions for summary judgment and that's how she approaches those questions even, uh probably give us a lot of insight into if she's going to continue her, you know, current viewpoint. Uh as the SEC tries to bring this case, you know, we talk so much about precedent setting in this industry in lieu of um, any clear regulation out of the agencies, is there any precedent that could be set here? Could we see anything, um, you know, either being classified as a commodity or anything that's come out of this creep up in any of the other cases outside of SE CV coin base. So, yes and no. Um, on the one hand, yeah, we might absolutely see other judges say, you know, in this ruling in this court, judge, uh you know, fia ruled Xyz. On the other hand, we've already seen, you know, within the southern district itself, the disagreement between judges. Um you know, for example, uh are we in September yet? Yeah, so a month and a half ago in July, uh Judge Ely Tores from the southern district ruled that uh ripples uh sale was a programmatic sales of XRP on exchanges did not violate securities law and a different judge, uh Judge Jed Rakoff on the same court uh in an sec versus terraform la case, uh very explicitly said he didn't not agree with that assessment with Judge Torrez's uh ruling and was, you know, rejecting that precedent. So, on the one hand, yeah, we can absolutely see judges, you know, say, ok, yeah, we agree with this. Uh we could also see them not agree with it. Um You know, it would become a lot more binding if this went up to the appeals court and the appeals court ruled one way or another. And you know, said, ok, well, we believe this judge is correct or we believe this judge is not correct, but until then it's kind of only a precedent in the same sense that, you know, it's, it, it has to be an agreement basically. And what are the chances that this might get to an appeals court? Um, given that it's a group of private plaintiffs, um I would say probably not, super likely depends on, you know, really how well funded they are and how willing they are to try and push for this case to continue. Um If you know, at least one of those things is not true or not feasible, then this case is, I assume will probably be, uh, well, that's why the end of it, you know, this is a ruling that's out there, but I would be surprised if we saw a follow up right now.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.