$28 million claim against Maker's cryptographic platform submitted to arbitration proceedings

The Court granted the application of Maker Ecosystem Development Foundation to transfer the current proceedings to arbitration.

In April, MakerDAO user Peter Johnson sued the Maker Foundation, Maker Ecosystem Growth Foundation and Dai Foundation, accusing them of providing false information to investors. The defendants claimed that their investment offer was safer than other assets because DAI stelecoin was over-provisioned.

According to the plaintiff, he and other investors suffered losses of six figures when the Ethereum price collapsed on March 12, causing massive liquidations of secured debt positions of users. Johnson says the project guaranteed a maximum loss of 13%. The white paper Maker states that this value is not fixed and may vary depending on internal ecosystem conditions.

Maker notes that Johnson has violated the terms of the arbitration agreement, which he adopted when joining the service in 2018, by applying to the court. According to this agreement, conflicts with clients must be resolved according to the rules established by the American Arbitration Association.

The plaintiff expects that up to 1,000 members may join the case, who will claim a total loss of $8.325 million and request $20 million in additional compensation. He himself claims to have lost over $200,000.

Earlier MakerDAO decided not to compensate users for losses caused by the market crash in March.