Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn
DeFi Project Bancor Clears Legal Battle as US Court Dismisses Lawsuit

DeFi Project Bancor Clears Legal Battle as US Court Dismisses Lawsuit

CryptoNewsCryptoNews2024/09/10 08:57
By:Shalini Nagarajan

Judge Robert Pitman ruled that Bancor's foreign operations are not subject to US securities laws.

Last updated:
September 10, 2024 03:29 EDT

A Texas federal judge on Monday dismissed a securities class action lawsuit against Bancor protocol operators. The judge agreed with a magistrate judge’s findings, stating that the plaintiffs failed to prove US courts had jurisdiction over the foreign defendants.

Judge Robert Pitman ruled that Bancor’s foreign operations are not covered under US securities laws, in line with the magistrate’s recommendation. He based the decision on the plaintiffs’ failure to show that the crypto transactions took place in the US or fell under US jurisdiction.

This means the plaintiffs cannot sue Bancor in the US over its alleged suspension of an investment protection feature.

Bancor, Founders Not Subject to US Jurisdiction, Judge Says

The magistrate judge stated that Bancor, its founders, and related entities in Israel or Switzerland lack sufficient ties to the US. The court, therefore, has no jurisdiction over them.

Further, he noted that US securities laws don’t apply due to extraterritoriality issues. He suggested that plaintiffs could pursue their complaints in Israeli courts, as defendants are based there.

Bancor Hit with Lawsuit After Halting Promised Loss Protection for Investors

In their complaint, the plaintiffs claimed Bancor promoted a feature called impermanent loss protection to shield their investments from losses. This feature supposedly aimed to attract liquidity providers to the protocol, leading to over $2.3b in crypto investments.

They asked the court to cancel their contracts. Also, they argued that Bancor’s failure to follow regulations made the contracts invalid. They also accused Bancor of violating Texas laws. The claims included fraud, breaking promises, mismanaging funds, and unfairly profiting at the investors’ expense.

The lawsuit alleged violations of the Securities Act of 1933 and the Exchange Act of 1934, along with claims of contract breach and unjust enrichment.

In 2022, after withdrawals triggered payment obligations to liquidity providers, Bancor stopped the impermanent loss protection . As a result, providers faced “the very losses that Defendants had promised to ‘100% protect’ against,” the lawsuit claimed.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

MARA's stock jumps after raising $1 billion via convertible notes to buy more bitcoin

MARA Holdings announced the successful closing of its $1 billion offering of 0% convertible senior notes due 2030.The bitcoin miner plans to allocate around $199 million of the proceeds to repurchase $212 million in principal of its existing convertible notes due 2026. The remaining funds will be used to acquire more bitcoin.

The Block2024/11/21 16:11

Gold loses luster as institutional demand fuels bitcoin price surge, analysts say

Bitcoin’s 46% surge over the past month, contrasted with gold’s 3% decline, highlights a shifting investor preference toward alternative store-of-value assets, analysts say.Derivatives traders are buying up bitcoin call options ahead of Trump’s inauguration, signaling strong bullish sentiment for the beginning of 2024.

The Block2024/11/21 16:11

SEC is 'engaging' Solana ETF applicants: report

SEC “engaging” on Solana ETF applications, sparking optimism for potential approval in 2025.VanEck, 21Shares, and Bitwise lead Solana ETF filings amid pro-crypto White House hopes.SOL token rises 4.6% to $247.91, bolstered by Solana’s strong DeFi ecosystem and demand.

The Block2024/11/21 16:11