A Federal Judge of Texas rendered a default judgment against Bancor Dao, which operated the decentralized Bancor decentralized financing platform, after having failed to respond to an online assignment.
Judge Robert Pitman rendered the judgment after Bancor Dao did not seem to defend himself following an assignment which was published on the Dao forum in January 2024.
“The defendant Bancor Dao did not answer or defend himself within the authorized period, and that the applicants demonstrated this failure,” wrote the clerk of the district court Philip Delvin on March 13.
The collective appeal implies investors who claim to have lost tens of millions of dollars due to the non-return of the stock market for liquidity problems during a withdrawal of withdrawal in 2022.
The default entry by the clerk against bench. Source: Law360
According to the complainants, who filed the complaint in May 2023, Bancor deceived investors about its waterproof loss protection mechanism for liquidity suppliers and also said that his token was an unregistered guarantee.
They said that the Ilp de Bancor operated on a deficit and had tried to cover by launching a new product, V3, which promised “some of the most competitive yields of the whole world […] Without asking users to take a risk. »»
Impermanent losses occur in the models of automated merchants DEFI when the suppliers of liquidity deposit assets in a swimming pool, and one of the tokens loses value against another in the pool.
Bancor stopped protection against impermanent losses, citing the “hostile” market conditions in June 2022.
The complainants also argued that Bancor Dao is a “general partnership not formed in a company” composed of holders of VBNT tokens and could be prosecuted as such, according to Law360.
The case was previously rejected entirely because the protocol developers were not based in the United States, but were reopened in December.
The complainants said that the DEFI platform “does not seem to be registered in a jurisdiction and has no office, postal address, administrators, administrators or appointed agents.”
Bancor is an onchain liquidity protocol which allows an automated and decentralized exchange between blockchains. It has $ 38 million of total locked value, a figure which is down 98% since its peak in May 2021, according to Defillama.
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The decision follows a similar case in which the Commodity Futures Trading Commission won a default judgment against Ooki Dao.
A California federal judge also judged in November that the DAO and their power members could be prosecuted in cases involving unregistered titles.
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