A Texas federal judge has entered a default judgment against Bancor DAO, which operated the decentralized finance platform Bancor, after it failed to respond to an online summons. 

Judge Robert Pitman issued the judgment after Bancor DAO did not appear to defend itself following a summons that was posted on the DAO’s forum in January 2024.

“Defendant Bancor DAO has failed to answer or otherwise defend itself within the time allowed, and that plaintiffs have demonstrated that failure,” wrote district court clerk Philip Delvin on March 13.

The class action involves investors who claim they lost tens of millions of dollars due to the exchange’s failure to warn about liquidity issues during a 2022 withdrawal spike.

Clerk’s entry of default against Bancor. Source: Law360

According to the plaintiffs, who filed the suit in May 2023, Bancor deceived investors about its impermanent loss protection mechanism for liquidity providers and also claimed its token was an unregistered security. 

They said Bancor’s ILP operated at a deficit and tried to cover by launching a new product, v3, which promised “some of the most competitive returns anywhere […] without asking users to take on any risk.”

Impermanent losses occur within DeFi automated market maker models when liquidity providers deposit assets into a pool, and one of the tokens loses value against another in the pool. 

Bancor paused impermanent loss protection, citing “hostile” market conditions in June 2022.

The plaintiffs also argued that Bancor DAO is an “unincorporated general partnership” consisting of vBNT tokenholders and could be sued in that capacity, according to Law360.

The case was previously dismissed entirely because the protocol developers were not based in the United States, but was reopened in December.

The plaintiffs said that the DeFi platform “does not appear to be registered in any jurisdiction and has no physical office location, mailing address, officers, directors, or appointed agents.”

Bancor is an onchain liquidity protocol that enables automated, decentralized exchange across blockchains. It has $38 million in total value locked, a figure that is down 98% since its peak in May 2021, according to DeFillama.

Related: Lawsuits could be catastrophic for DAOs if denied ‘limited liability’

The ruling follows precedent from a similar case where the Commodity Futures Trading Commission won a default judgment against Ooki DAO.

A California federal judge also ruled in November that DAOs and their governing members can be sued in cases involving unregistered securities.

Magazine: Mystery celeb memecoin scam factory, HK firm dumps Bitcoin: Asia Express

A US bankruptcy court has authorized liquidators of defunct crypto hedge fund Three Arrows Capital (3AC) to increase their claim against collapsed crypto exchange FTX from $120 million to $1.53 billion.

Chief Judge John Dorsey rejected FTX’s debtors’ argument that the amended proof of claim (POC) from 3AC liquidators was untimely and an unjust attempt to slow the bankruptcy proceedings.

In a March 13 ruling in the US Bankruptcy Court for the District of Delaware, Dorsey opined that 3AC liquidators had provided sufficient notice of their claim and the possibility of amending it once they had analyzed all the available information. Any delay, he said, was caused by FTX’s failure to share relevant records promptly.

Chief Judge John Dorsey has granted the motion by liquidators for defunct hedge fund Three Arrows Capital to increase their claim against FTX to $1.53 billion. Source:

“The evidence suggests that the delay in filing the Amended Proof of Claim was, in large part, caused by the Debtors themselves,” Dorsey said.

“The evidence also suggests that the Liquidators were diligent in attempting to obtain the information and that despite having the complete information in their possession, the Debtors repeatedly delayed giving it to them.”

3AC liquidators initially filed a $120 million claim in FTX’s bankruptcy case in June 2023. They later expanded it in November 2024, alleging claims including breach of contract, unjust enrichment, and breach of fiduciary duty.

The liquidators alleged FTX held $1.53 billion in the hedge fund assets that were liquidated to settle $1.33 billion in liabilities in 2022.

They argued that the transactions were avoidable, caused harm to 3AC creditors and that FTX debtors had delayed providing the information that would have uncovered the liquidation.

FTX debtors objected to the amended claim, saying that the original POC was insufficient to inform them about the nature and amount 3AC liquidators would be claiming and that it came too late and should be disallowed.

Related: FTX filed for bankruptcy 2 years ago — What’s happening now?

Before its collapse in June 2022, Three Arrows Capital was once one of the industry’s largest crypto hedge funds, with over $3 billion in assets.

Its liquidators also pursued claims against collapsed crypto firm Terraform Labs through a $1.3 billion claim in Terra’s bankruptcy case.

At the same time, FTX, which filed for bankruptcy in November 2022, has been undertaking its own recovery efforts to reclaim funds.

In November last year, it filed a trio of lawsuits, one against SkyBridge Capital and its founder, Anthony Scaramucci, to recoup funds spent by former FTX CEO Sam “SBF” Bankman-Fried on sponsorship and investment deals. 

Another suit was filed against crypto exchange Binance and its former CEO, Changpeng Zhao, to recover $1.76 billion worth of cryptocurrency sent to the exchange as part of a July 2021 repurchase deal.

Waves founder Aleksandr Ivanov is also in the crosshairs for $80 million worth of crypto sent to the Waves-based decentralized liquidity protocol by Alameda Research in 2022.

Magazine: Crypto fans are obsessed with longevity and biohacking: Here’s why

A Delaware court has granted a temporary reprieve to a Pennsylvanian Bitcoin mining firm currently in a payment dispute with its hosting company — barring the hosting provider from blocking access and otherwise commandeering the miner’s 21,000 rigs at the property. 

Vice Chancellor Morgan Zurn granted a temporary restraining order on March 12, requested by Bitcoin miner Consensus Colocation and systems owner Stone Ridge Ventures against Mawson Hosting, which provides hosting and colocation services for Bitcoin miners.

The firms have been in disagreement over alleged unpaid fees, the terms of their agreement and Consensus’ plan to relocate, allegedly leading to Mawson blocking the miner’s personnel from accessing the site.  

The firms have also alleged Mawson has been operating the rigs since Feb. 28 for their own gain after preventing Consensus from entering the premises.

Mawson, however, claims they are allowed to use the rigs under the terms of its agreement with Consensus, and they have the right of first refusal for its relocation plans.

The Bitcoin miner has been seeking injunctive relief to regain control of their equipment and prevent Mawson from using them. 

As part of the March 12 order, Mawson is barred from using the hashrate from the miners and will no longer be allowed to restrict Consensus’s digital and physical access to the rigs in the Midland, Pennsylvania, facility. 

A Delaware judge has granted a temporary restraining order barring Mawson Infrastructure Group from using the rigs at the Midland, Pennsylvania, facility. Source: Law360

The temporary restraining is in force until the matter can be heard in a preliminary injunction hearing.

Mawson Infrastructure Group and Consensus Colocation did not immediately respond to Cointelegraph’s request for comment. 

How the dispute began

In a March 6 legal complaint, lawyers acting for Consensus accused Mawson of mining Bitcoin (BTC) with their rigs — valued at $30 million — since Feb. 28, generating daily profits of between $100,000 and $200,000 while blocking access to them both physically and through VPN access. 

Consensus and Stone Ridge signed a colocation agreement with Mawson in December 2023. 

They agreed to terminate the partnership by the end of March 2025, with a gradual reduction in capacity leading up to the deadline and a removal process scheduled to begin on March 3.

Mawson argues that it was owed fees and electricity prepayments for February and March, and its colocation agreement gives it the right to redirect the hashrate of Consensus’ miners and use the proceeds to replenish the deposit.

Related: US-Canada tariff flip-flops have Bitcoin miners on their toes

“On its face, it was operative only prior to April 1, 2024, and only in narrow circumstances relating to the replenishment of a deposit,” lawyers acting for Consensus said in the suit. 

“When Mawson began redirecting the hashrate on Feb. 28, the deposit was fully paid. And in any event, Mawson has stolen hashrate worth many times more than the $17,505.45 Mawson claims, without justification, that Consensus owes in purported late fees.”

Magazine: Train AI agents to make better predictions… for token rewards