DAO Forfeits Millions Of Dollars Of Tokens, Conflict Ensues

The decentralized autonomous organization (DAO) governing the Juno (CRYPTO: JUNO) ecosystem voted to confiscate millions of dollars worth of JUNO tokens and the investor who saw his money endangered is considering legal action.

What Happened: A Juno whale — cryptospeak for large holder — was accused of gaming the token's airdrop to gain access to more tokens than he should be able to, which led the community to decide to forfeit most of his funds, according to a recent Coindesk report.

The investor in question, a 24-year-old Japanese man named Takumi Asano, claims the funds belong to a community of people who invest through him.

Asano purportedly leads Japanese investment group CCN, where he staked Cosmos (CRYPTO: ATOM) on roughly 50 different wallets. When Juno airdropped its tokens to everyone who had any Cosmos staked on a 1:1 basis, it did so with a cap of 50,000 JUNO, a cap that he had apparently evaded. This resulted in CCN raking in around 10% of Juno's total token supply and when he moved all the tokens to a single wallet, the community caught on.

Back in March, the community passed the original proposal 16 which showed most tokenholders approved the forfeiture of Asano's tokens. Within a few weeks, the ecosystem went offline due to a smart contract attack and Asano claimed in a tweet the project's lead developers were secretly selling off large quantities of tokens — bearing the responsibility for the price drop.

On Friday, the community passed proposal 20 with 72% approving it: this automatically results in the revocation of all except for 50,000 of Asano's JUNO tokens. The forfeited tokens will be moved to a community-controlled smart contract. Asano told Coindesk that he might consider legal action depending on the community's next actions:

“If this lock is based on the assumption that the asset will be returned to our clients, we do not intend to do any legal action. [...] On the other hand, if it is based on the premise of a [b]urn or permanent lock, we are considering taking legal action against each validator.”