{"id":125048,"date":"2025-03-14T06:15:36","date_gmt":"2025-03-14T06:15:36","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=125048"},"modified":"2025-03-14T06:15:36","modified_gmt":"2025-03-14T06:15:36","slug":"texas-court-issues-judgment-against-bancor-dao-after-it-ignored-summons","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=125048","title":{"rendered":"Texas court issues judgment against Bancor DAO after it ignored summons"},"content":{"rendered":"<p>Source: Cointelegraph.com NewsA Texas federal judge has entered a default judgment against Bancor DAO, which operated the decentralized finance platform Bancor, after it failed to respond to an online summons.\u00a0<br \/>\nJudge Robert Pitman issued the judgment after Bancor DAO did not appear to defend itself following a summons that was posted on the DAO\u2019s forum in January 2024.<br \/>\n\u201cDefendant Bancor DAO has failed to answer or otherwise defend itself within the time allowed, and that plaintiffs have demonstrated that failure,\u201d wrote district court clerk Philip Delvin on March 13.<br \/>\nThe class action involves investors who claim they lost tens of millions of dollars due to the exchange\u2019s failure to warn about liquidity issues during a 2022 withdrawal spike.<br \/>\nClerk\u2019s entry of default against Bancor. Source: Law360According to the plaintiffs, who filed the suit in May 2023, Bancor deceived investors about its impermanent loss protection mechanism for liquidity providers and also claimed its token was an unregistered security.\u00a0<br \/>\nThey said Bancor\u2019s ILP operated at a deficit and tried to cover by launching a new product, v3, which promised \u201csome of the most competitive returns anywhere  without asking users to take on any risk.\u201d<br \/>\nImpermanent losses occur within DeFi automated market maker models when liquidity providers deposit assets into a pool, and one of the tokens loses value against another in the pool.\u00a0<br \/>\nBancor paused impermanent loss protection, citing \u201chostile\u201d market conditions in June 2022.<br \/>\nThe plaintiffs also argued that Bancor DAO is an \u201cunincorporated general partnership\u201d consisting of vBNT tokenholders and could be sued in that capacity, according to Law360.<br \/>\nThe case was previously dismissed entirely because the protocol developers were not based in the United States, but was reopened in December.<br \/>\nThe plaintiffs said that the DeFi platform \u201cdoes not appear to be registered in any jurisdiction and has no physical office location, mailing address, officers, directors, or appointed agents.\u201d<br \/>\nBancor is an onchain liquidity protocol that enables automated, decentralized exchange across blockchains. It has $38 million in total value locked, a figure that is down 98% since its peak in May 2021, according to DeFillama.<br \/>\nRelated: Lawsuits could be catastrophic for DAOs if denied \u2018limited liability\u2019<br \/>\nThe ruling follows precedent from a similar case where the Commodity Futures Trading Commission won a default judgment against Ooki DAO.<br \/>\nA California federal judge also ruled in November that DAOs and their governing members can be sued in cases involving unregistered securities.<br \/>\nMagazine: Mystery celeb memecoin scam factory, HK firm dumps Bitcoin: Asia Express<a href=\"https:\/\/cointelegraph.com\/news\/texas-court-issues-judgment-against-bancor-dao-for-ignoring-summons?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_partner_inbound\" target=\"_blank\" class=\"feedzy-rss-link-icon\" rel=\"noopener\">Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Source: Cointelegraph.com NewsA Texas federal judge has entered a default judgment against Bancor DAO, which operated the decentralized finance platform Bancor, after it failed to respond to an online summons.\u00a0&hellip; <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/125048"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=125048"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/125048\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=125048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=125048"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=125048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}