Bancor DAO Loses Lawsuit for Failure to Appear
Date: 2025-03-14 Author: Gabriel Deangelo Categories: BUSINESS
The class action lawsuit was filed in May 2023 by investors who accused Bancor of concealing liquidity issues that arose in 2022 and misrepresenting the operation of its intermittent loss protection (ILP) mechanism. They claimed that the ILP was unprofitable and was supported by the implementation of a new version of the Bancor protocol, v3, which was advertised as providing high returns without risks. However, in June 2022, the project suspended ILP operations, citing adverse market conditions.
The lawsuit also claims that the Bancor token (BNT) should be considered an unregistered security and that the Bancor DAO is an unincorporated general partnership between vBNT token holders.
The case was previously dismissed due to the protocol developers being located outside the United States, but was reopened in December 2024. The plaintiffs emphasized that the DeFi platform is not registered in any jurisdiction and has no physical address or official representatives.
The protocol currently has $39 million in locked assets, down 98% from its peak in May 2021, according to DeFi Llama.
Earlier in November, a California court ruled that Lido DAO is a general partnership, meaning that its members are financially liable for its activities.
