Lido DAO

Gary

Northern

Partner

<p>A former Lido holder has filed a class-action lawsuit against the Lido decentralized autonomous organization (DAO), a governing body that manages the liquid staking protocol, according to a recent court document.</p>
<h2 id="an-unregistered-securities-claim">An unregistered securities claim</h2>
<p><br> <a href="https://www.courtlistener.com/docket/68095676/1/samuels-v-lido-dao/" rel="noopener noreferrer nofollow">Andrew Samuels filed the complaint</a> on December 17th in a Northern California courthouse, alleging Lido’s token, LDO, was knowingly offered and sold as an unregistered security.&nbsp;</p>
<p><a href="https://cryptonews.com/news/proof-of-stake-alliance-updates-best-practices-signed-by-coinbase-paradigm-and-more.htm" rel="noopener noreferrer nofollow">The complaint states that as a DAO, Lido was set up</a> “with the explicit goal of avoiding regulatory scrutiny for its fundamentally illegal business.”</p>
<p>“As one Lido DAO member put it, there was an understanding that Lido could avoid ‘the potential of SEC enforcement action’ because “[t]he Lido DAO is a fully-decentralized organization with no legal entities,” the complaint reads in part.</p>
<p>Moreover, the complaint calls on the words of U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler, who “recently stated that, other than Bitcoin, all crypto ‘tokens are securities because there’s a group in the middle [between the tokens and investors] and the public is anticipating profits based on that group.’”</p>
<h2 id="a-tipped-balance-of-power">A tipped balance of power</h2>
<p><br> Originally starting with a small cluster of investors, <a href="https://cryptonews.com/news/lido-dao-receives-request-for-15-million-funding-expand-solana-liquid-staking.htm" rel="noopener noreferrer nofollow">Lido DAO was able to open its platform</a> to the public by posting its token to centralized crypto exchanges. However, this caused its price to fall drastically, causing losses to smaller investors like Samuels.</p>
<p>Furthermore, Samuels alleges that the staking protocol’s concentration of power was tipped in the favor of its institutional investors including Dragonfly, Paradigm, Robot Ventures, and AH Capital Management, all of which are listed as partner defendants in the lawsuit.</p>
<p>“The Lido founders and its institutional investors like Partner Defendants <a href="https://cryptonews.com/news/value-locked-solanas-liquid-staking-protocols-surged-by-91-first-half-of-year.htm" rel="noopener noreferrer nofollow">were not content to simply run Lido’s</a> (fundamentally illegal without registration) business for a profit,” the complaint reads in part, “They also wanted to be able to earn money on their investments through a potential “exit” opportunity.”</p>
<p>“Because 64 percent of the tokens are dedicated to the founders and early investors like Partner Defendants, ordinary investors like Plaintiffs are unable to exert any meaningful influence on governance issues,” the filing continues.</p>
<h2 id="an-impressive-liquid-staking-protocol">An impressive liquid staking protocol</h2>
<p><br> Samuels is arguing that Lido DAO is responsible for his and other clients’ losses and is requesting rescissory damages.</p>
<p><a href="https://defillama.com/protocol/lido" rel="noopener noreferrer nofollow">As one of the largest liquid staking protocols in the crypto industry</a>, Lido boasts a TVL of greater than $20 billion. The most recent data shows its market cap at an estimated $1.85 billion.</p>
<p>Samuels is asking for a jury trial, coverage of legal fees, and more.</p>
<p>Image source: Pixabay</p>

Former Lido Holder Files Lawsuit Against Lido DAO

Tabla de contenidos

Cryptonews.com

Otros artículos publicados el 18 dic 2023

Kripto AVAX, Pengenalan Singkat Namun Menyeluruh

100x Meme Coin Sponge Launches V2 – Is $SPONGEV2 The Best Crypto to Buy Now?

Bitcoin ETF: US SEC Acknowledges Pando’s Application

Web3 Digital Marketing: A Comprehensive Guide

Solana Phone Sales Surge is Replicated in the SOL Coin Price

Ripple Executive Predicts Surge in Institutional Adoption

¡Únete a nuestro boletín gratuito para recibir actualizaciones diarias de criptografía!