[Lido DAO voting designated entity responds to pending class action lawsuit]
Following a class-action lawsuit filed against Lido DAO in the U.S. District Court for the Northern District of California, the ethereum staking service recently began voting to appoint an entity to respond to the lawsuit.
The lawsuit, filed on April 3, accuses Lido DAO of violating securities laws by operating an Ethereum staking business in the form of a "general partnership." The plaintiffs’ contention that LDO tokens or related transactions were illegally offered or sold to the public sent shockwaves through the industry.
On June 27, the U.S. court ruled that the plaintiff had sufficiently served the legal process on Lido DAO through public release. The staking service provider has 14 days to respond. Failure to respond could result in the court issuing a default judgment at the plaintiff's request, posing a significant threat to the project.
To reduce risk, the community initiated a vote to appoint an entity to respond to litigation. Voting took place on snapshot.org and quickly gained significant traction. The proposal proposes authorizing Dolphin CL, LLC to file a motion to dismiss the class action lawsuit, but Dolphin CL will not act as a general representative or agent of Lido DAO and will only file motions on its behalf.
Currently, the ballot measure has significant support, with 51 million votes in favor, or 100% of the total, and no votes against. The community emphasized that failure to pass the proposal may bring further risks, as a default judgment may hinder community operations.
During this period, trading in Lido DAO’s native token, LDO, was weak, coinciding with legal uncertainty. At the time of writing, LDO price is down 4.12% over the past day and is trading at $1.55, with daily lows and daily highs of $1.55 and $1.63 respectively. The weekly chart shows a 20.86% loss in its value and the monthly chart shows a 30.66% loss, with the lawsuit linked to the bearish sentiment.
It’s worth noting that cryptocurrencies like XRP and ETH are also subject to regulatory uncertainty. Crypto market enthusiasts are waiting for further developments.
