Uniswap Sued for Allowing Fraud
A Uniswap user in the U.S. has filed a class-action lawsuit against the decentralized exchange (DEX) and its investors, claiming that the exchange’s failure to comply with American securities laws is to blame for her financial losses.
User Nessa Riley alleges that Uniswap’s failure to register as a broker-dealer with the Securities and Exchange Commission (SEC) and lack of Know Your Customer (KYC) requirements allowed scammers to engage in pump and dump schemes on the platform. She claims that the exchange has not taken sufficient action to stop these fraudulent activities.
The plaintiff also alleges that many tokens trading on the exchange are unregistered securities, and that if she had received disclosures in line with U.S. securities laws, she and other investors might have avoided fraudulent projects like EthereumMax, Alpha wolf Finance, BezogeEarth, and RocketBunny.
Uniswap Labs is the organization that manages the Uniswap DEX protocol. However, financial regulators have not figured out what regulatory obligations could be required of entities like Uniswap Labs that merely provide underlying technology and do not actually operate a decentralized exchange.
Lightning Network Volume Up 400%
Bitcoin’s layer-2 scaling solution, Lightning Network, has seen payment volume increase by over 400% as adoption grows
The high-speed, low-cost transactions enabled by Lightning have led to a spike in payments volume of 410% over the past year. Arcane Research reports that the number of payments made through Lightning has doubled since 2021, and the value of these transactions has quadrupled.
However, the commonly used metrics such as total value locked (TVL) are not optimal to gauge Lightning’s real adoption, as it doesn’t account for private channels and invisible nodes. Per Arcane, a much better way to measure actual Lightning adoption would be by observing increases in total volume on the network.
Further, the rise of third-party facilitator apps like Chivo in El Salvador and CashApp in the United States have significantly added to the surge of payment volume on the network. In August 2021, only about a hundred thousand people had access to Lightning; by March 2022, the potential user base had grown to 80 million.
Arcane’s research found that roughly 52% of the volume of payments on the network represented peer-to-peer transactions between users. Nearly one-third of the volume came from exchange deposits and withdrawals, while the remaining 20% accounted for merchant payments.
LFG Buys $100 M Avalanche to Backstop TerraUSD
Luna Foundation Guard (LFG), an organization that aims to promote the Terra/Luna ecosystem. is buying $100 million worth of AVAX tokens. The foundation has previously purchased $1 billion worth of Bitcoin to build a treasury reserve that will serve as a backstop for Terra’s stablecoin, UST.
LFG was established by Terra co-founder Do Kwon and TerraForm labs Head of Research Nicholas Platius in February 2022. The duo managed to raise a billion dollars for the foundation by selling LUNA tokens.
Terra is similar to other smart contract blockchains like Ethereum and Solana, but has a relatively unique economic structure. There are two cryptocurrencies in the Terra ecosystem, Luna and TerraUSD (UST).
Terra’s protocol is designed in a way that requires users to burn LUNA tokens to mint more UST. This design is a mechanism that keeps the price of UST pegged to the dollar. However, Do Kwon believes that this mechanism is not a reliable pegging system in the long term. Thus, the LFG has decided to build a $10 billion treasury consisting of Bitcoin and AVAX tokens that will be used to support UST.