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Former LDO holder files class-action lawsuit against Lido DAO for crypto losses

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.

The investor claimed that 64% of LDO tokens are controlled by just a few venture capital firms, preventing ordinary investors from having any control over decisions.

A LDO holder initiated a class-action lawsuit against the governing body for liquid staking protocol Lido, according to a complaint filed in a San Francisco United States District Court on Dec. 17.

The lawsuit alleges that Lido’s LDO token is an unregistered security and that the Lido decentralized autonomous organization (Lido DAO) is liable for plaintiffs’ losses from the token’s price decline.

A former Lido holder has filed a class-action lawsuit
The complaint filed against Lido DAO on Dec. 17. Source: CourtListener

The defendants in the lawsuit are Lido DAO, Paradigm, AH Capital Management, Dragonfly Digital Management, and Robert Ventures….

  • A Lido holder has filed a class action lawsuit against Lido DAO, the governing body for the liquid staking protocol Lido.
  • The lawsuit claims that the Lido token is an unregistered security and holds Lido DAO responsible for the decline in the token’s price.
  • Lido is a liquid staking protocol that allows users to delegate their Ether (ETH) and earn staking rewards while holding a derivative token called “stETH.”
  • The lawsuit alleges that a significant portion of Lido tokens are held by founders and early investors, limiting the influence of ordinary investors on governance issues.
  • Lido DAO initially consisted of institutional investors but later decided to sell Lido tokens to the public, resulting in losses for investors when the token’s price fell.
  • The lawsuit names Lido DAO and several venture capital firms as defendants.
  • The document claims that Lido is considered a security based on the anticipation of profits by the public.
  • Lido has the largest total value locked of any liquid staking derivative, with over $19 billion worth of cryptocurrency locked in its contracts.
  • The Lido governance token reached an all-time high of $6.41 per coin during the last bull market and is currently valued at $2.08 per coin.

Lido is a liquid staking protocol that allows users to delegate their Ether ETHtickers down$2,213 to a network of validators and earn staking rewards while also holding a derivative token called stETH that can be used in other applications. It is governed by holders of LDO, which collectively form Lido DAO.

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