PoolTogether Raises $1M, To Hit Legal Defense Funding Target

  • PoolTogether has already raised over $1 million worth of ETH for its legal defense.
  • In January, a former political staffer filed a class-action lawsuit against PoolTogether.
  • “[The] allegations lack merit but a thorough defense is still needed,” said the crypto savings protocol.

Crypto savings protocol PoolTogether has already raised over $1 million worth of Ethereum (ETH) for its legal case against a former political staffer. The funds came from the company’s NFT crowdfund launched weeks ago.

Having raised 605.30 ETH, this brings the company close to its target of at least 769 ETH or approximately $1.5 million. PoolTogether has only 19 days left before the “Pooly NFT” campaign ends. Notably, the collection consists of a series of 1,110 NFTs, available at three donation levels.

In January, Joseph Kent filed a class-action lawsuit against PoolTogether. Aside from PoolTogether Inc. and its Co-Founder Leighton Cusack, defendants include investors such as venture capitalists Dragonfly, Nascent, and Galaxy digital.

Kent, the former technology lead for 2020 US presidential candidate Senator Elizabeth Warren, in his complaint, alleges the defendants operate and promote an “illegal lottery” in New York.

The plaintiff further argues that PoolTogether “may never offer a positive expected value” since the platform keeps 50% of the weekly prize as a reserve. It was reported that he was seeking compensation worth double the value of funds he spent on purchasing PoolTogether lottery tickets, aside from the doubled amount of legal fees.

“[The] allegations lack merit but a thorough defense is still needed,” said PoolTogether. “[The lawsuit appears] to be a deliberate effort to put some of the DeFi Community’s core doctrines to the test.”

PoolTogether claims to offer risk-free stablecoin lottery deposits by using ticket buyers’ and liquidity providers’ capital to generate interest using DeFi lending protocols. Meanwhile, the lottery winner will get the highest share of the yield, with runner-ups receiving the smaller share.