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Texas court issues judgment against Bancor DAO after it ignored summons

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.

Texas court issues judgment against Bancor DAO after it ignored summons

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

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Crypto to become UAE’s second-biggest sector in 5 years — Institutional investor

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Crypto to become UAE’s second-biggest sector in 5 years — Institutional investor

Crypto to become UAE’s second-biggest sector in 5 years — Institutional investor

The crypto industry is set to experience massive growth in the United Arab Emirates (UAE) due to its pro-tech and business regulations.

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Blockchain security must localize to stop Asia’s crypto crime wave

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Blockchain security must localize to stop Asia’s crypto crime wave

Blockchain security must localize to stop Asia’s crypto crime wave

Without localized risk detection and public–private cooperation, illicit capital will continue to flow unchecked, and trust in the system will collapse.

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Thousands more Afghans affected by second data breach, ministers say

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Thousands more Afghans affected by second data breach, ministers say

Thousands more Afghan nationals may have been affected by another data breach, the government has said.

Up to 3,700 Afghans brought to the UK between January and March 2024 have potentially been impacted as names, passport details and information from the Afghan Relocations and Assistance Policy has been compromised again, this time by a breach on a third party supplier used by the Ministry of Defence (MoD).

This was not an attack directly on the government but a cyber security incident on a sub-contractor named Inflite – The Jet Centre – an MoD supplier that provides ground handling services for flights at London Stansted Airport.

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July: UK spies exposed in Afghan data breach

The flights were used to bring Afghans to the UK, travel to routine military exercises, and official engagements. It was also used to fly British troops and government officials.

Those involved were informed of it on Friday afternoon by the MoD, marking the second time information about Afghan nationals relocated to the UK has been compromised.

It is understood former Tory ministers are also affected by the hack.

Earlier this year, it emerged that almost 7,000 Afghan nationals would have to be relocated to the UK following a massive data breach by the British military that successive governments tried to keep secret with a super-injunction.

Defence Secretary John Healey offered a “sincere apology” for the first data breach in a statement to the House of Commons, saying he was “deeply concerned about the lack of transparency” around the data breach, adding: “No government wishes to withhold information from the British public, from parliamentarians or the press in this manner.”

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July: Afghan interpreter ‘betrayed’ by UK govt

The previous Conservative government set up a secret scheme in 2023 to relocate Afghan nationals impacted by the data breach, but who were not eligible for an existing programme to relocate and help people who had worked for the British government in Afghanistan.

The mistake exposed personal details of close to 20,000 individuals, endangering them and their families, with as many as 100,000 people impacted in total.

Read more on Sky News:
Data breach victims sent spam emails
Afghan data leak timeline
MoD urged to reveal details of nuclear incident

A government spokesperson said of Friday’s latest breach: “We were recently notified that a third party sub-contractor to a supplier experienced a cyber security incident involving unauthorised access to a small number of its emails that contained basic personal information.

“We take data security extremely seriously and are going above and beyond our legal duties in informing all potentially affected individuals. The incident has not posed any threat to individuals’ safety, nor compromised any government systems.”

In a statement, Inflite – The Jet Centre confirmed the “data security incident” involving “unauthorised access to a limited number of company emails”.

“We have reported the incident to the Information Commissioner’s Office and have been actively working with the relevant UK cyber authorities, including the National Crime Agency and the National Cyber Security Centre, to support our investigation and response,” it said.

“We believe the scope of the incident was limited to email accounts only, however, as a precautionary measure, we have contacted our key stakeholders whose data may have been affected during the period of January to March 2024.”

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