Lawyer Dismiss Seizure of Fei Protocol Despite Class-Action Charge
Investors hurt in April 2021 event were alerted about a message displayed on Fei Labs’ Discord. This message explained how to file a compensation claim as part of a continuing class-action charge against the platform.
Lawyers Downplay Claim Authorities Seized Fei Platform’s Discord Server
According to a lawyer representing the complainants in a class action lawsuit against DeFi project Fei Labs, authorities failed to seize the platform’s Discord server last week as earlier claimed. Rather, the vastly covered notice targeted investors negatively impacted by a flimsy launch occasion two years ago.
Crypto Twitter disclosed the images taken on the legal notice that appeared on the Fei’s Discord server. This notice originated from the Superior Court of San Francisco and referenced a legal NFT dropped into investors’ wallets. Users were alerted of the opportunity to acquire a portion of the multimillion-dollar initial settlement.
According to some observers, this action is Discord server’s seizure. However, the complainant’s attorney revealed that this was false. Rather, they claimed that the notice was posted via a collaboration between Fei Labs and a settlement administrator.
Fei Labs posted a message on its website revealing that its Fei Protocol and Tribe DAO are not under development anymore. It also pleaded with users to take out all funds contained in the Tribe DAO-associated contracts.
Endless Twists in Fei Labs Project
The settlement notice is the newest event in a tale that started two years ago when Fei Labs initially provided Fei, its namesake algorithmic stablecoin. In addition, it also provided Hunt with its governance token in 2021. Incentives are the basis of algorithmic stablecoins and aid in keeping the coin fixed to a fiat currency’s value. Concerning Fei’s case, the United States dollar is used.
The uniqueness of Fiat’s token was due to its utilization of the software that punished persons attempting to trade it below its peg. Besides, it rewarded persons who purchased it below its peg. The emergency of a bug during the launch resulted in tokens below their beg. However, the developers acquired $1.3 billion from Fei and Tribe.
On April 1 2022, a class-action suit was filed in a San Francisco court where Fei and other developers were charged with using these tokens to sell unregistered securities. Finally, in May 2023, an initial settlement was agreed upon. This meant that Fei Labs did not have to acknowledge any offense.
Creating a fund worth approximately $18 million covered the notices and fees incurred during the case. Further, all petitioners must provide notice for compensation by October 1. An ultimate settlement hearing is planned for October 27 to decide on settlement approval.
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