PANews reported on July 6 that according to the Snapshot page, the Lido community initiated a proposal to "designate an entity to respond to pending class action lawsuits against Lido DAO." It proposed to appoint and hire Dolphin CL, LLC ("Dolphin"), a Delaware limited liability company, as legal counsel and to appear in the lawsuit as "Lido DAO" with a funding of 200,000 DAI. The proposal will be voted on July 10.
The motion states that a plaintiff filed a class action lawsuit in the United States District Court for the Northern District of California, case number 3:23-cv-06492 (the "Complaint"), and named "LIDO DAO, a general partnership" as a defendant. In the Complaint, Lido DAO is accused of being a "general partnership engaged in the business of Ethereum staking", and LDO tokens or LDO token transactions are alleged to be securities or securities transactions, and Lido DAO is accused of offering or selling these securities to the public in violation of securities laws.
On June 27, the court ruled that the plaintiffs’ actions to serve legal documents on Lido DAO through various public releases were lawful, and required Lido DAO to respond within 14 days or face a default judgment on the plaintiffs’ claims. Although various venture capital funds were also named as defendants in the complaint, none of them responded in the name or on behalf of Lido DAO, and in fact, they denied that they were part of Lido DAO. Therefore, the risk of Lido DAO facing a default judgment if “Lido DAO” does not submit a response is real.
Therefore, the proposal is to appoint and fund Dolphin CL, LLC, a Delaware limited liability company ("Dolphin"), to retain counsel (currently expected to be Brown Rudnick, led by partner Stephen Palley), to appear in the above case as "Lido DAO" without admitting and expressly objecting that Lido DAO is a partnership, association, or other legally identifiable group or entity, and to present all necessary or desirable legal arguments to dismiss the lawsuit against Lido DAO for any reason that Dolphin and its counsel deem reasonable, appropriate, and without prejudice, without admitting jurisdiction or any other adverse legal facts (including, but not limited to, the notion that Lido DAO is a legal person). The requested funding is 200,000 DAI, which is expected to be sufficient to cover the costs of Dolphin and its counsel in drafting, filing, and arguing the motion regarding the Lido DAO complaint.