A Lido Holder Files Class-Action Lawsuit Against Lido DAO
A Lido holder has initiated a class-action lawsuit against the governing body for the liquid staking protocol, Lido DAO. The lawsuit claims that the Lido token is an unregistered security and holds Lido DAO responsible for the decline in its price, resulting in losses for investors.
What is Lido?
Lido is a liquid staking protocol that allows users to delegate their Ether (ETH) to validators and earn staking rewards while holding a derivative token called stETH. It is governed by holders of Lido (LDO), who form Lido DAO.
The Lawsuit Details
The lawsuit was filed by Andrew Samuels from Solano County, California. The defendants include Lido DAO and several venture capital firms. The document alleges that a majority of Lido tokens are owned by founders and early investors, leaving ordinary investors with no influence on governance matters.
The filing claims that Lido DAO initially consisted of institutional investors but later decided to sell tokens to the public through centralized exchanges. When the token’s price fell, investors like Samuels suffered losses, leading to the liability of the defendants.
Is Lido a Security?
Quoting SEC Chair Gary Gensler, the lawsuit argues that Lido is a security due to the presence of an intermediary group between the tokens and investors and the anticipation of profits by the public based on this group.
Lido’s Market Position
Lido has the highest total value locked among liquid staking derivatives, with over $19 billion worth of cryptocurrency locked in its contracts. The LDO token reached an all-time high during the previous bull market but currently sits at $2.08 per coin.
Hot Take: Lido Holder Files Lawsuit Alleging Unregistered Security
A Lido holder has taken legal action against Lido DAO, claiming that the Lido token is an unregistered security. The lawsuit alleges that the defendants, including venture capital firms, are responsible for losses resulting from the token’s price decline. This case raises questions about the governance and ownership structure of Lido DAO, as well as the classification of Lido as a security. As the legal proceedings unfold, it remains to be seen how this lawsuit will impact the future of liquid staking protocols and their compliance with regulatory frameworks.
By
By
By
By
By