Lido DAO has recently initiated voting to authorize Dolphin CL, LLC, to file a petition on its behalf in response to the class-action litigation that alleges that LDO violated securities law.
Following the filing of a class-action lawsuit against Lido DAO in the United States District Court for the Northern District of California, the Ethereum staking service has recently initiated a vote to select an entity to address the ongoing class-action litigation.
According to the lawsuit, which was submitted on April 3, 2019, Lido DAO is accused of violating security laws by operating as a “general partnership” that “operates an Ethereum staking business.” The plaintiff contended that public offerings or sales of LDO tokens or related transactions are unlawful. This legal development has caused shockwaves throughout the industry.
The U.S. court determined on June 27 that the plaintiffs had adequately served Lido DAO with the legal procedure through public postings. The staking service provider was granted a fourteen-day period to respond.
Failure to respond within the designated time frame may result in a default judgment by the court, as per the plaintiffs’ allegations. This prospective outcome represents a substantial hazard to the enterprise.
In an effort to reduce these risks, the community has implemented a voting process to designate an entity to address the pending class-action lawsuit. The voting was live on snapshot.org and immediately gained significant traction in the broader market.
Dolphin CL, LLC authorizes the filing of a motion to dismiss the class-action suit, which is particularly noteworthy. Dolphin CL, on the other hand, will not act as the general representative or delegate of Lido DAO; rather, it will submit a motion on its behalf.
In the interim, the proposal’s chances of passing have significantly improved as of the time of this writing. A remarkable 51 million individuals voted in favor, which accounted for 100% of the total ballots. None of the votes were against the proposal.
Additionally, the community emphasized that the project could be exposed to additional risks if the proposal is not passed, as the default judgment could impede community operations, despite the uncertainty.
In the interim, the native token of Lido DAO, LDO, traded at a slow pace, which coincided with legal uncertainty.
Despite the general market’s upward trend, the LDO price has decreased by 4.12% in the past day. The token traded at $1.55, with daily lows and peaks of $1.55 and $1.63, respectively.
While the monthly chart demonstrated a 30.66% decline, the weekly chart demonstrated a 20.86% decline in value. The lawsuit coincides with the inactive price action, which has sparked bearish sentiments.
It is important to recognize that cryptocurrencies like XRP and ETH are prominent examples of how regulatory uncertainty negatively impacts price. Crypto market enthusiasts anticipate additional developments regarding the subject.
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