Aragon DAO, a decentralized autonomous organization, has passed two votes that support a lawsuit against its founding team, allocating $300,000 in funding for the legal battle.
The voting process saw unanimous approval for the proposal, with 1.6 million governance tokens cast in favor, according to voting results.
The second vote regarding funding witnessed 1.6 million tokens in favor and 1 million tokens against.
The decision comes as a response to the Aragon Association’s move to dissolve itself and discontinue its governance token, ANT, through redemptions for ether.
The association made this decision independently, without consulting the DAO, citing legal constraints as the reason for the move.
The proposed lawsuit intends to challenge the decision made without a vote and raises concerns about the Aragon Association potentially retaining $50 million.
The proposal aims to hold the responsible members of the Aragon Association accountable to ensure that investor funds are returned and not absorbed by the association’s new undisclosed company.
To pursue legal action and negotiate with the Aragon team, the DAO has allocated $300,000 in funding to Patagon Management LLC.
Patagon, an investment company owned by Diogenes Casares, has previously taken legal action against Wei “Max” Wu in relation to the Spartacus DAO, where token holders felt they suffered losses due to a similar restructuring.
The funding has been transferred to Patagon’s wallet in the stablecoin USDC.
The proposal also allows other individuals to contribute financially to the lawsuit.
If the case is won, these contributors will receive their funds back with a 10% annual interest rate and a 5% share of the total funds to be returned to token holders.
However, if the case is lost, they will not receive compensation.
An oversight committee will monitor the progress of the lawsuit.
It consists of representatives from investment firm Arca, crypto trader DCF God, and pseudonymous individuals known as Wismerhill, Tedward, CM, Triangular, and Yakitori.
Aragon Association Claims Majority of ANT Holders Have Redeemed Tokens
The Aragon Association has said that a significant number of Aragon token holders have redeemed their tokens, surpassing the number of tokens used in the voting process.
They argued that this suggests that the recent vote may not be fully representative of the Aragon community.
The Aragon core team clarified that they are not part of the Aragon Association and had no decision-making power in the association’s dissolution.
It is worth noting that individuals involved in the potential lawsuit against Aragon and serving on the oversight committee have been previously engaged in disputes and dealings with DAOs.
The RFV Raiders, a group of crypto activists, have been associated with efforts to shut down DAOs and distribute their treasuries among token holders.
Furthermore, Aragon has implied that Avraham Eisenberg, who took responsibility for the attack on Mango Markets, belonged to the group.
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