DeFi Startup PoolTogether Drops NFT Collection for Defense Against Lawsuit

Decentralized finance (DeFi) platform PoolTogether recently launched its own NFT collection to raise funds for its legal defense. Earlier in October, Joe Kent filed a class-action lawsuit against the startup for allegedly violating New York state’s gambling laws. Kent is a former staff member of Sen. Elizabeth Warren, who has established her stance as being anti-crypto.

PoolTogether enables users to participate in a game where they may win prizes by simply depositing funds on the platform. Kent, however, described the startup’s operations as part of a “Lottery Scheme” which is considered illegal under New York Law. The politician furthered that he was “gravely concerned that the cryptocurrency ecosystem – which requires the use of enormous amounts of electricity – is accelerating climate change and allowing people to evade financial regulations and scam consumers.”

Included in the lawsuit is PoolTogether founder Leighton Cusack alongside investors of the platform consisting of Stanislav Kulechov, Dragonfly Capital, Compound Labs, and Galaxy Digital Capital Management. Kent filed the case after he deposited $10 on the platform. Other decentralized projects could significantly be affected depending on the outcome of this particular lawsuit.

Brian Klein and Kevin Broughel, serving as lawyers of the defendants, however, remarked that the case seems unreasonable. “This apparently ideologically driven lawsuit is a waste of the court’s and everyone else’s time,” said Klein. On the other hand, Broughel maintained that the company “doesn’t own or control the protocol” and that its functions are “governed by its original coding.”

In response, PoolTogether announced the drop of its recent NFT collection titled “Pooly,” which comes in three editions that sell for .1 ETH, 1 ETH, and 75 ETH, respectively. The platform’s target goal is to raise 769 ETH (approximately $1,425,000). So far, just two hours after its launch, the collection raised 73 ETH (around $135,000). Buyers of the tokens are, likewise, encouraged to change their profile pictures to Pooly NFTs in an effort to raise awareness.

Sources: CoinDesk, NFT Evening