Maker firm settles for $1.16M with users liquidated in Covid crash
A pair of firms operating under the Maker ecosystem has moved to settle for $1.16 million with investors who sought compensation for financial losses suffered after the “Black Thursday” COVID crash in March 2020. Plaintiff Peter Johnson lodged the class action lawsuit one month after the collapse. The case was filed for numerous investors who claimed the Maker Foundation and related entities intentionally misrepresented the risks of collateralized debt positions (CDPs) on the platform, leading to losses totaling $8.3 million. Maker’s CDPs (or vaults) allow users to take out overcollateralized DAI loans using crypto such as ether (ETH), but those assets can be liquidated if the value of their collateral slips below a certain point. Johnson said he experienced such losses when ETH tanked up to 45% around Mar. 12, 2020 — a day dubbed “Black Thursday” — dropping from $200 to $110. MakerDAO’s native token MKR sank about 60% at the same time, while the total crypto market lost near...