on the crypto
A lawsuit has been filed against the Maker Foundation on behalf of investors who lost funds following a protocol failure on March 12, also known as Black Thursday.
The lawsuit, which could represent up to 3.000 investors, was brought to the Northern California District Court by plaintiff Peter Johnson represented by Harris Berne Christensen LLP of Portland, Oregon.
The terms of the lawsuit
The lawsuit concerns the Maker Foundation and associated parties - including the Maker Ecosystem Growth Foundation, Dai Foundation and Maker Foundation - "who intentionally misrepresented the risks associated with CDP ownership" resulting in the loss of $ 8,325 million in cash from the investors during Black Thursday.
Johnson has filed three indictments including negligence, intentional false statement and false negligent statement. Johnson expects 1.000 members to join the lawsuit to make payments equivalent to the lost funds of each investor, in addition to the cost of damages valued at $ 20 million, plus interest and additional costs.
The company's response
"The Maker Foundation and other third-party user interfaces informed users that because their CDPs would be significantly over-guaranteed, the liquidation events would only result in a 13 [percent] penalty applied against the remaining guarantee, after which the the rest of the guarantee would have been returned to the user, ”says the lawsuit.
Instead, many positions have been completely or almost completely liquidated. Johnson claims that various Maker products, including the commonly used decentralized Oasis application, claim that a 13% sanction is the highest strike for liquidation. The lawsuit also specifically mentions Maker's recent pressures with the Coinbase cryptocurrency exchange to attract CDP owners.
The creator's answer
Meanwhile, the Maker community itself is collaborating on partial compensation for users who have suffered from MakerDAO's architectural flaws. A poll among MKR governance token holders approved an initial vote on April 13th to reimburse investors who were liquidated. unfairly in mid-March.
The dynamics of the refund, for example in which currency the investments will be refunded and in what amount, will be defined in another survey. If successful, this survey will lead to a final vote on executive governance.
Compensation is possible
However, well before discussing other details, an indemnity clause has been included to protect the Maker Foundation. ”To withdraw, the vault holders will need to access a web page where they commit to compensate Maker and the affiliates from any claims legal for loss, ”says the survey.
It is unclear how a decentralized community of investors can create a legal document on behalf of a foundation to support its protocol.
Preston Byrne, attorney for Anderson Kill LLP, said the word "is not secure enough to constitute a binding contract" and that if a "CDP holder who has suffered losses, he has not voted on the poll and has not accepted the proposal to cut, he would almost certainly not be bound by that indemnity term. "