David Hoffman, the co-founder of the multimedia studio Bankless, has expressed regret for having propagated claims about a “Wells notice carpet bombing” that was allegedly targeting cryptocurrency companies, including the decentralised financial protocol Lido Finance.
The term “carpet bombing” was used to describe a wave of Wells notices that, according to Hoffman’s source, were delivered to crypto businesses last week. On March 3, he revealed the unreliable details on the Bankless Show podcast.
“Several DeFi apps have received Wells notices, which are many. […] Over the past week, wells notices have been distributed throughout the sector. He answered, “I think Lido got one, but it hasn’t come to light yet.
The following day, Hoffman expressed regret for mentioning the protocol in the rumour and emphasised on Twitter that Lido had refuted the assertion. He reiterated that unscheduled wells notices had been sent to cryptocurrency companies before saying that “Lido doesn’t deserve to be focused on explicitly here”:
It seems commonly recognised that there are unexpected Wells Notices out there, but it’s impossible to know how many or when they were served, according to other sources that we consulted.
According to data from CoinMarketCap, the rumour caused the price of the Lido DAO (LDO) token to drop by around 20% on March 3. An quick response to Cointelegraph’s request for comment from Lido Finance was not received.
A regulatory authority may issue a Wells notice to notify of infractions discovered during an inquiry. It is essentially a letter informing a company of anticipated enforcement action.
In regard to its Binance USD stablecoin, which the commission says is an unregistered security, stablecoin issuer Paxos recently got a Wells notice from the United States Securities and Exchange Commission.
Recently, the Dollar Coin issuer Circle was faced with rumors regarding Wells notifications. Dante Disparte, chief strategy officer and head of worldwide policy at Circle Pay, promptly refuted the rumour, according to Cointelegraph.
