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A class action lawsuit aimed at obtaining more than $ 28 million from the Maker Foundation and several of its affiliates is said to be filed with the U.S. federal court, according to a media company.
In the draft complaint, the Maker Foundation, a non-profit foundation that supports the development of MakerDAO’s Decentralized Finance Protocol (DeFi), was accused of distorting protocol risks for investors and for failing to protect their interests.
The complaint alleges negligence, willful distortion and negligent distortion in relation to the alleged losses. The lawsuit does not appear to have been filed with the Northern District Court of California in the U.S., although it could be filed this Tuesday.
“While distorting the real risks to collateralized debt position (CDP) holders, the Maker Foundation ignored its responsibility to its investors by promoting, or at least taking into account, the conditions that led to Black Thursday, all of which came after millions of actively Dollars of investment in the ecosystem have been requested, “the complaint said.
When asked for a comment, a spokesman for the Maker Foundation said, “The Maker Foundation has no comment on planned or pending legal action.”
The lawsuit against the Maker Foundation is linked to a series of liquidations that took place between March 12 and 13 as part of a major market event, colloquially known as “black Thursday”.
As reported by one point of sale at the time, a sharp drop in ether (ETH) prices triggered liquidations across the DeFi ecosystem. In the case of MakerDAO, the market event resulted in a no-auction offer that resulted in undersecured debt of approximately $ 2 million.
In the complaint, plaintiff Peter Johnson, who claims to be one of the victims of unsolicited comparison auctions, has 1,713.7 ETH collateral enclosed in a CDP or vault with a comparison price of $ 121.49. When the price of ETH fell below this point, the sub-collateralised debt was sent to comparison auctions, some of which were won by bidders with 0 DAI. This resulted in some vault holders losing all of their collateral and not the maximum 13% penalty imposed on the collateral as promised by the Maker protocol.
In this sense, the complaint states: «The auctions with zero bidders did not take place, and Maker paid reasonable compensation for his penalties of 13%. Mr. Johnson would have lost no less than 348 ETH of its collateralworth at least USD 42,000 at the time of liquidation or USD 54,600 today.
Johnson said in the complaint that he was a “former ETH investor” who participated in maker-related activities and “became a CDP owner in November 2018”.
According to the document, Johnson is seeking $ 8.35 million for three complaints and $ 20 million for punitive damages. The plaintiff also seeks interest and court costs before and after the procedure, and “any other legal or probable remedy available”.
The lawsuit is a “presumed” lawsuit, which means that it still needs to be upheld by the court to achieve this status. It also remains to be seen whether the plaintiff will be accepted by the court as a legal representative. So Johnson seems to be looking more users to “join this fair pay case”by a group of victims of the auctions with 0 MakerDAO bids that were formed on telegram.
Since the event on March 12, there has been extensive discussion in the MakerDAO forum as to whether the liquidation of the safes of the animal owners should be compensated.
A chain survey that was completed on April 13. showed that around 65% of MKR owners with voting rights agreed to compensation for the victims of $ 0 auctions on Black Thursday. However, compensation plans have yet to be established.
Johnson is represented by Adam Heder of Harris Berne Christensen LLP, a legal company based in Portland, OR.
Translated version of the article by Celia Wan and Michael McSweeney, published in TheBlockCrypto.
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