A Sued DeFi Project Turns to NFTs to Raise Legal Fees

On Thursday, May 26^th, the co-founder of PoolTogether Inc. called for his Twitter followers to show support for the protocol by minting Pooly NFTs. Leighton had been sued by Joseph Kent for running an “illegal” lottery. The funds raised from minting the NFTs will be used to fund PoolTogether’s legal defense and support its mission.

As some of you know, I’m currently being sued (personally) in a putative class action lawsuit.

I can’t speak about it publicly because the litigation is ongoing but I want to share some context and ask for your help.
— Leighton 🛡 (@lay2000lbs) May 26, 2022

Interestingly, just 24 hours later, Leighton informed his audience that the team have reached 25% of the funding goal. He acknowledged that the decline in crypto activities during this period made him quite pessimistic about the outcome of the call for funding. However, members of the PoolTogether community have pulled funds together to keep the protocol alive.

At the moment, more than 500 Pooly NFTs have been minted to defend the project. Numerous individuals have also shared Leighton’s call for help, showing solidarity with the project.

The Lawsuit

Leighton was dragged to court by Joseph Kent, a former tech lead for Senator Elizabeth Warren. Joseph believes that PoolTogether is not as glamorous as perceived and the development of the protocol is a crime under the New York law.

According to its whitepaper, PoolTogether Inc. is a blockchain-based app that runs autonomously. The protocol incentivizes users who invest in the reward pool and has a similar framework to crypto staking.

However, Mr. Kent sees the project as a lottery scheme, on hand to exploit users. Also, questions have been raised regarding who will be held responsible if things go south with the autonomous protocol.

In defense of the accusations, Kevin Broughel, a lawyer for PoolTogether emphasized that the protocol runs without the need for human interference. Any need to make iterations to the protocol can be decided on by the governing members of the protocol. PoolTogether Inc. simply runs a website that provides users with information on how to use the protocol.

Supposedly, Joseph Kent’s lawsuit was fueled by a lack of understanding of DeFi protocols and apathy for cryptocurrencies. Leighton will now be optimistic that his team gets the necessary support to overcome Joseph Kent’s roadblock.