Bancor DAO hit with class-action suit over impermanent loss protection promises By Cointelegraph

A group of investors has filed a class-action suit against the Bancor decentralized autonomous organization (DAO); its operator, BProtocol Foundation; and its founders in the United States District Court for the Western District of Texas. The plaintiffs claim, among other things, that Bancor deceived investors about its impermanent loss protection (ILP) mechanism for liquidity providers and was an unregistered security.

According to the suit, Bancor’s v2.1 investment product, introduced in October 2020 and the second to feature ILP, operated at a deficit that the defendants were aware of 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.”