The DAO expressed dissatisfaction with the team’s recent move to dissolve its governing body and shut down its token without consulting the community.
A decentralized autonomous organization (DAO) is taking legal action against its founding team after a decision to dissolve its governing body and distribute most of its assets to tokenholders.
On Nov. 2, the team behind Aragon announced that it would be dissolving the Aragon Association. The group said it’s deploying the organization’s treasury so that ANT tokenholders can redeem Ether (ETH) in exchange for their tokens. The update will give back around $155 million in digital assets to its stakeholders.
Citing various reasons, the team behind Aragon shut down the ANT token and dissolved its governing body without consulting the DAO. This has angered a faction in its community, which expressed strong dissatisfaction with the move.
This is pretty crazy
The @AragonProject DAO has voted yes sue the Aragon team directly for the unfair redemption offer
Might be the first time ever a dao pays to go legal on its own team? pic.twitter.com/bP27niQx1V
— DCF GOD (@dcfgod) November 21, 2023
On Nov. 21, the DAO voted to allocate 300,000 USD Coin (USDC) to Patagon Management, a Delaware-based company owned by Diogenes Casares, to take legal action against Aragon. The firm will spearhead the negotiations and lawsuit against the Aragon team.
According to the proposal, this will ensure that “a reasonable amount of dead token funds are returned to those that have redeemed pro-rata and not taken away from these former tokenholders.”
The passed proposal also allows Patagon to maintain confidentiality when it comes to protecting the legal process and to have the ability to decide on a legal strategy. However, all of Patagon’s financial transactions related to the case will be in public reports. Patagon will also store the funds in a wallet address and a bank account separate from the company’s business accounts.