RFC - Ape Transparency Reports

Yes - I saw that too when I read the filings. You are NOT wrong! The ApeCoin DAO is NOT a named party in this suit.

Again, there is some confusion here. Let me explain for the sake of clarity.

The “ApeCoin DAO” is NOT the same as “Ape DAO Board Defendants”. The latter is just a descriptor created by the plaintiff in order to collectively refer to the parties (in this case, those 4 people) as a set. It’s no different from using “Class Acton Party” to refer to 1000 plaintiffs in a class action lawsuit. This is how it’s used in lawsuits for clarity.

See how both “Ivan Soto-Wright” AND his corp, “MoonPay USA LLC” were BOTH sued and referred to collectively as "MoonPay and together with Ivan Soto-Wright, the “MoonPay Defendants”"

If the Ape Coin DAO were in fact sued, it too would have been written similar to the above naming the 4 DAO board members and the DAO (which itself is a legal entity).

So, no - this lawsuit is NOT targeting ApeCoin DAO as that would imply ALL MEMBERS of the DAO - including you (I wasn’t a member at the time of the lawsuit, so it wouldn’t include myself or anyone who joined after the lawsuit was filed). It is targeting 4 [named] members of the Special Council who were in the SC at the time.

To say that naming 4 members of the board is somehow targeting all members of the DAO would be like saying suing the Ford board of directors is the same as suing Ford or the shareholders of Ford. That’s not true. Another example: Suing a Ford shareholder isn’t the same as suing Ford. In this incident case, for example, they sued the owner/ceo of MoonPay and the MoonPay corp itself.

The conclusion is that, for some [unknown] reason, the SC is apparently paying the legal bills for 4 prior [unelected] members of the ApeCoin DAO board even though they - and the DAO - probably had nothing to do with the activities cited in the lawsuit. Normally, such a frivolous filing would be subject to a Motion To Dismiss. Thus far, I don’t see one being filed obo of any of those 4 people. Which I find strange.

At best - unless there is evidence (e.g. in discovery) that the previous iteration of the DAO was somehow involved in the activities that Yuga is being sued for - this is a frivolous lawsuit against those 4 people. Again, nothing an MfD can’t fix. And the latter would only succeed if in fact those 4 people were not involved in those activities being cited.

Regardless, when it’s all said and done, obviously these 4 people, in their roles in the DAO board, had indemnity clauses in their contracts, which is probably how the Apecoin DAO is now picking up the tab for their legal defense. And guess what? If the lawsuit prevails, those settlement costs AND the awarded amounts will also have to be paid from the ApeCoin DAO treasury. Not to mention the legal costs of any appeals.

And this is just one lawsuit with this amount of legal bills - and it’s likely to grow and grow. Imagine what happens when the fight with regulators comes around - or even a copycat lawsuit if this one prevails.

I have to mention that this is a perfect example of why I was clamoring about larger legal funds for the incoming working group bodies. I said this:

"We need to set aside a monthly budget pool that goes towards a “Legal Expense” pool. If not, what happened to every single DAO that’s either dead or dying, is going to happen to us.

So, setting aside a measly $6.5K per month legal fund is incredibly short-sighted. At a minimum, this needs to be $100K per month for $1.2M per year. Then capped for 24 months so, once the fund reaches that amount some months down the road, it no longer increases. This way, the legal pool is sitting there waiting to be spent because the primary target is not going to be the DAO entity itself, the target is going to be the entire Ape Foundation because of how it has setup its structure. Everyone - and do I mean everyone in the org chart - is likely to get a subpoena once the SEC/CFTC get around to their full-blown crack down."

And on July 24, I wrote this too regarding DAO member legal liabilities.

Thinking out loud, I also have to wonder how is the DAO paying these legal fees for the 4 former DAO Special Council, but in the AIP-317 cited above, they’re talking about setting up a separate fund for legal expenses. @amplify.Admin since that’s your AIP, can you please shed some light on this?