A former American investor has filed a lawsuit against Lido DAO in San Francisco District Court over mismanagement and potential distribution of Lido crypto tokens. The plaintiff claims that there is unfair control over the token!
Lido is one of the leading liquidity betting protocols on the market, with TVL recently reaching an all-time high of $22 billion.
Sued Lido DAO for unfair control of the token
Andrew Samuels, a resident of Solano County, California, filed a lawsuit over the mismanagement and potential distribution of Lido tokens.
The plaintiff also claims that the Lido token is an unregistered security, making the company issuing it, Lido DAO, along with several venture capital and investment management firms, liable for financial losses incurred by investors. Due to the low value of the token.
Also, in the lawsuit, Samuels asserts that about 64% of Lido tokens are owned by a few founding members and early investors.
These entities include prominent venture capital firms such as Paradigm, AH Capital Management, and Robert Ventures.
The plaintiff argues that this concentration of token ownership has marginalized the influence of ordinary investors on the governance and decision-making processes within the Lido ecosystem.
The lawsuit’s narrative then delves into the origins of Lido DAO, which initially emerged as a general partnership involving institutional investors.
However, over time, the organization changed its strategy to offer what is referred to as a “potential exit opportunity” to these investors.
This shift led to the public sale of Lido tokens, which was facilitated by their listing on centralized cryptocurrency exchanges.
The move has certainly attracted investments from a wide range of investors.
Including the plaintiff, but it subsequently led to a decline in the market value of the token, resulting in significant losses for these investors.
The lawsuit also claims that Lido DAO tokens may qualify as securities because they are managed by a central group and that investors bought them with expectations of profit.
Mainly influenced by the decisions of this central group.
