DeFi altcoin project PoolTogether ran an NFT sale to crowdfund its legal defense against an individual who invested $10 in the protocol and sued the company behind it for providing an “unauthorized lottery scheme,” raising over $830,000 in five days. The price of altcoins rose as a result of this news.
DeFi altcoin project sells $830,000 in NFT
The crypto community has rallied behind DeFi app PoolTogether, helping it secure over $830,000 for its legal battle chest. PoolTogether, one of Ethereum’s oldest DeFi protocols, has turned to NFTs to raise funds for its legal defense against a class action lawsuit that could set an undesirable precedent for the entire DeFi industry. With the impact of the news, the altcoin price jumped from $1.42 to $1.60. At the time of writing, it was trading at $1.57, gaining 9% on a daily basis.
PoolTogether on Thursday released the Pooly NFT collection with three NFTs available in price tiers of 0.1 ETH, 1 ETH and 75 ETH. The collection has since raised 437.2 ETH, worth approximately $833,000 at current prices for the legal war chest. The campaign has also received support from leading voices in the crypto industry, including Uniswap creator Hayden Adams and Ryan Sean Adams and David Hoffman, co-founders of the popular Bankless podcast.
What is the charge against PoolTogether?
As reported on Kriptokoin.com news, last October, a software engineer and former employee of the anti-crypto Democrat Senator Elizabeth Warren, Joseph Kent, a Delaware company named PoolTogether Inc., gave an ‘unauthorized lottery’ in New York state. filed a class action lawsuit for allegedly activating the ‘scheme’. Kent deposited $10 worth of crypto into the protocol and subsequently claimed that PoolTogether Inc. was running an illegal prize-based savings game in his New York City residence.
PoolTogether co-founder Leighton Cusack, announcing the NFT crowdfunding campaign, said on Twitter that “the allegations are irrelevant, but a comprehensive defense is still needed.” In its defense, PoolTogether claims that its corporate entity does not own or control the underlying smart contract-based protocol and only operates the interface that gives users access. He also argues that DeFi implementation ‘lossless’ deposits cannot qualify as lottery tickets.
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