Fei is a once-famous decentralized stablecoin project that aims to provide an anchor value with the US dollar. Launched in the spring of 2021, Fei Protocol was one of the few algorithmic stablecoins backed purely by cryptocurrency at the time. The project introduces the concept of "protocol-controlled value", which means that deep liquidity is owned and managed by the protocol. Unlike other systems, liquidity cannot be removed at any time.
Recently, Fei Protocol’s settlement plan for a class action lawsuit was released. The San Francisco High Court personally ended the case and issued an announcement on the Fei Protocol Discord channel, saying that wallet users who participated in Fei Protocol’s creation activities can fill in the form to declare the settlement compensation, which is in the encryption The world is still the industry's first.
PREVIOUS: 2022 Hacks and Divided Votes
Fei suffered several hacks in 2022, which caused the community to doubt the protocol and technical capabilities.
The most serious hacking attack directly led to the split of the Fei community. In mid-2022, TribeDAO, the organization behind Fei, suffered a reentrancy attack following its merger with Rari Capital, resulting in the theft of $80 million worth of crypto assets. After the theft, two completely different voices appeared, which led to turmoil and almost split in the community, and the entire Fei Protocol gradually ended in this dispute.
So what are the two different sounds?
One plan is to use the TRIBE (Fei’s governance token) token pool to fully compensate the victims who were damaged in the hacking incident. Loss. However, this proposal was rejected in the vote, mainly because the Fei team believed that the hacker mainly attacked Rari, the other party in the merger, and TribeDAO was also a victim of the hacking attack, so TribeDAO should not be compensated, at least not all of them. Amount of compensation. They backed an alternative proposal, proposing to stabilize the FEI stablecoin against the U.S. dollar and use funds from 57 million TRIBE tokens to compensate hack victims. This scheme does not pay out in full, which has been criticized by many people. Some critics claim that the partial compensation package proposed by Fei's group retains most of the project's funding.
CLASS ACTIONS OF 2023
After the chaos of 2022 came to an end, Fei Protocol and its three founders faced a class-action lawsuit this year over one of the most familiar grounds for cryptocurrency projects: charges against Fei’s tokens FEI and TRIBE. are unregistered securities.
Just this July 9th, a San Francisco court took over Fei Protocol’s Discord server and issued an authorization notice announcing a proposed settlement agreement that would award individuals and entities who purchased FEI or TRIBE tokens during the Genesis Event Claim payment of USD 17.85 million was made.
According to the court documents, the sale of unregistered securities was the main reason for the violation, and for a period of time "the FEI token failed to maintain its anchor price, trading as low as $0.7128 per FEI. Investors quickly sought to exit their positions, but Penalized by the Fei Protocol for "direct incentives" in doing so. Anyone attempting to sell FEI during this period suffered a loss. The TRIBE token also failed to hold its value, falling over 80% from the Genesis Event opening price In short, the class-action plaintiffs allege that Fei sold unregistered securities and caused them considerable losses.
**This cause of action is intriguing - if Fei sold unregistered securities, it is a question of whether plaintiffs knew when they bought them. The entire lawsuit does not mention that the plaintiffs were deceived or purchased without knowing whether they were registered securities. If the reason for the lawsuit is to sell unregistered securities and cause losses to users, it sounds very unfair to the project party: if it makes money, it will be fine. Once it falls, users who participated in the ICO at that time can use "unregistered securities" "Securities" and demand compensation, so who is willing to be the project party? **
Under the settlement agreement, the net settlement fund, less attorneys' fees and court costs, will be distributed pro rata to class members who file claims. The fund is expected to be worth $13 million, subject to approval. Eligible individuals and entities may submit a claim form to receive a portion of the settlement amount, file an objection, or opt out and retain the right to file a separate lawsuit against Fei Protocol.
Four options for Genesis membership are available on the website
The Fei Protocol team has denied wrongdoing. However, the whole incident has raised concerns and uncertainties about the future development of Fei Protocol.
The court will hold a hearing in the future to consider whether to approve the settlement agreement. Odaily Planet Daily will also keep an eye on the development of this incident.
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The Fei team is facing a class action lawsuit. I didn’t expect to see the court account in Discord one day
What is Fei? What happened recently?
Fei is a once-famous decentralized stablecoin project that aims to provide an anchor value with the US dollar. Launched in the spring of 2021, Fei Protocol was one of the few algorithmic stablecoins backed purely by cryptocurrency at the time. The project introduces the concept of "protocol-controlled value", which means that deep liquidity is owned and managed by the protocol. Unlike other systems, liquidity cannot be removed at any time.
Recently, Fei Protocol’s settlement plan for a class action lawsuit was released. The San Francisco High Court personally ended the case and issued an announcement on the Fei Protocol Discord channel, saying that wallet users who participated in Fei Protocol’s creation activities can fill in the form to declare the settlement compensation, which is in the encryption The world is still the industry's first.
PREVIOUS: 2022 Hacks and Divided Votes
Fei suffered several hacks in 2022, which caused the community to doubt the protocol and technical capabilities.
The most serious hacking attack directly led to the split of the Fei community. In mid-2022, TribeDAO, the organization behind Fei, suffered a reentrancy attack following its merger with Rari Capital, resulting in the theft of $80 million worth of crypto assets. After the theft, two completely different voices appeared, which led to turmoil and almost split in the community, and the entire Fei Protocol gradually ended in this dispute.
So what are the two different sounds?
One plan is to use the TRIBE (Fei’s governance token) token pool to fully compensate the victims who were damaged in the hacking incident. Loss. However, this proposal was rejected in the vote, mainly because the Fei team believed that the hacker mainly attacked Rari, the other party in the merger, and TribeDAO was also a victim of the hacking attack, so TribeDAO should not be compensated, at least not all of them. Amount of compensation. They backed an alternative proposal, proposing to stabilize the FEI stablecoin against the U.S. dollar and use funds from 57 million TRIBE tokens to compensate hack victims. This scheme does not pay out in full, which has been criticized by many people. Some critics claim that the partial compensation package proposed by Fei's group retains most of the project's funding.
CLASS ACTIONS OF 2023
After the chaos of 2022 came to an end, Fei Protocol and its three founders faced a class-action lawsuit this year over one of the most familiar grounds for cryptocurrency projects: charges against Fei’s tokens FEI and TRIBE. are unregistered securities.
Just this July 9th, a San Francisco court took over Fei Protocol’s Discord server and issued an authorization notice announcing a proposed settlement agreement that would award individuals and entities who purchased FEI or TRIBE tokens during the Genesis Event Claim payment of USD 17.85 million was made.
According to the court documents, the sale of unregistered securities was the main reason for the violation, and for a period of time "the FEI token failed to maintain its anchor price, trading as low as $0.7128 per FEI. Investors quickly sought to exit their positions, but Penalized by the Fei Protocol for "direct incentives" in doing so. Anyone attempting to sell FEI during this period suffered a loss. The TRIBE token also failed to hold its value, falling over 80% from the Genesis Event opening price In short, the class-action plaintiffs allege that Fei sold unregistered securities and caused them considerable losses.
**This cause of action is intriguing - if Fei sold unregistered securities, it is a question of whether plaintiffs knew when they bought them. The entire lawsuit does not mention that the plaintiffs were deceived or purchased without knowing whether they were registered securities. If the reason for the lawsuit is to sell unregistered securities and cause losses to users, it sounds very unfair to the project party: if it makes money, it will be fine. Once it falls, users who participated in the ICO at that time can use "unregistered securities" "Securities" and demand compensation, so who is willing to be the project party? **
Under the settlement agreement, the net settlement fund, less attorneys' fees and court costs, will be distributed pro rata to class members who file claims. The fund is expected to be worth $13 million, subject to approval. Eligible individuals and entities may submit a claim form to receive a portion of the settlement amount, file an objection, or opt out and retain the right to file a separate lawsuit against Fei Protocol.
Four options for Genesis membership are available on the website
The Fei Protocol team has denied wrongdoing. However, the whole incident has raised concerns and uncertainties about the future development of Fei Protocol.
The court will hold a hearing in the future to consider whether to approve the settlement agreement. Odaily Planet Daily will also keep an eye on the development of this incident.