Lido DAO Votes To Appoint Entity to Respond In Pending Class Action Litigation

In the aftermath of a class-action lawsuit filed against Lido DAO in the United States District Court for the Northern District of California, the Ethereum staking service has recently started voting to appoint an entity to respond to the pending class-action litigation.

The lawsuit, filed on April 3 this year, alleges Lido DAO to have violated security laws as it operates as a “general partnership” that “runs an Ethereum staking business.” Particularly, LDO tokens or related transactions are unlawfully offered or sold to the public, the plaintiff argued. This legal development has sent shockwaves across the industry.

Lido DAO Starts Voting: Here’s Why

On June 27, the U.S. court ruled that the legal process had been served adequately on Lido DAO via public postings by the plaintiffs. The staking service provider was offered 14 days to respond.

A failure to respond within the given time frame could lead to a default judgment by the court, based on the plaintiffs’ claims. This potential outcome poses a significant threat to the project.

In an effort to mitigate these risks, the community has initiated a voting process to appoint an entity to respond to the pending class-action lawsuit. The voting went live on snapshot.org, promptly gaining significant traction across the broader market.

Notably, the proposal suggests authorizing Dolphin CL, LLC to file a motion to dismiss the class-action suit. However, it’s clarified that Dolphin CL will not serve as the general representative or proxy of Lido DAO and will only file a motion on its behalf.

Meanwhile, at press time, the proposal’s odds of passing appear to have gained significant favor. A staggering 51 million voted yes, amounting to 100% of total votes. Not a single vote was against the proposal.

Also, the community spotlighted that not passing the proposal could present further risks to the project, as although not sure, the default judgment could hamper community operations.

In the interim, LDO, the native token of Lido DAO, traded sluggishly, coinciding with legal uncertainty.

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LDO Price Dips

As of writing, the LDO price dipped 4.12% over the past day despite the broader market uptrend. The token traded at $1.55, with its daily lows and peaks being $1.55 and $1.63, respectively.

The weekly chart showed a 20.86% plunge in value, while the monthly chart showed a 30.66% fall. This sluggish price action coincides with the lawsuit, sparking bearish sentiments.

It’s worth noting that cryptocurrencies such as XRP and ETH are prime examples of how regulatory uncertainty negatively impacts price. Crypto market enthusiasts await further developments on the matter.

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