coinedition.com
A few disgruntled investors of the popular Web3 lending service, Compound Finance, have filed a lawsuit asking the business to halt sales of its native COMP coin. The plaintiff, among other things, is unhappy about the price performance of COMP since its launch.
The case noted,
Retail COMP purchasers generally have not fared well. The value of COMP peaked in May 2021 at nearly $500 per token, equating to a total market cap of about $4 billion. It soon halved in value, and in the fall of 2021, COMP’s market capitalization was a little more than $2 billion.
According to data from the market tracking site CoinMarketCap, COMP trades at $39.44, with a 3% increase in the last seven days. Interestingly, COMP has depreciated 96% from its all-time high (ATH) of $911.20 last year.
Furthermore, the unsatisfied investors claimed in the lawsuit that the US Securities and Exchange Commission (SEC) received no registration statements regarding the offering of COMP tokens. The plaintiffs argued:
“Users purchase COMP to gain an ownership share in the compound business, expecting to earn profits based on the efforts of the Partner Defendants. No registration statements have been filed with the SEC or have been in effect concerning offering COMP tokens.”
Notably, the Compound protocol is one of the most prominent decentralized finance (DeFi) protocols, with a Total Value Locked (TVL) of $1.78 billion, according to DefiLlama, the largest TVL aggregator.
In late August, Compound introduced a new streamlined version of its protocol called Compound III. According to a blog post by the founder, Robert Leshner, the new protocol focuses on security, capital efficiency, and user experience while cutting down on complexity.