Bankless content studio co-founder David Hoffman apologized for spreading rumors about what he called “Wells Notice Carpet Bombing” targeting crypto companies, including decentralized finance protocol Lido Finance.
“Carpet bombing” is a reference to the flood of well notices sent to crypto companies last week, Hoffman told the source. They together unverified information on March 3 during the Bankless Show podcast.
“Many well notices have been published for many DeFi applications. […] News Wells has been taken out in the industry in the past week. It hasn’t been seen yet,” he said, before noting that “I think Lido’s got it.”
The same day, Hoffman clarified on Twitter that Lido had denied the claim and apologized for naming the protocol in the rumor. “Lido doesn’t deserve special focus here,” he said, before stating that the undeclared well news had been sent to crypto companies:
“After checking with other sources, it seems that most people assume that there are Wells Notices out there that have not been announced, but cannot say how many, or how recently they have been served.”
The rumors led to a nearly 20% drop in the price of the Lido DAO (LDO) token on March 3, according to CoinMarketCap data. Lido Finance did not immediately respond to Cointelegraph’s request for comment.
Update on the “Wells Notice Carpet Bombing” statement in the Weekly Rollup
I checked with the source, and have some clarifications to make.
1. Time and concentration
I said that “A lot of Wells news has been distributed In the last week or so”.
The “week” part is… https://t.co/1TzUWYyxVd
– DavidHoffman.bedrock _ (@TrustlessState) March 3, 2023
A well notice is a warning sent by a regulatory authority to inform about a violation discovered through an investigation. Essentially, this is a letter informing the company of the enforcement action it will take.
Stablecoin issuer Paxos recently received a well notice from the United States Securities and Exchange Commission (SEC) for allegedly violating investor protection laws regarding its Binance USD (BUSD) token, which the commission claims is an unregistered security.
Rumors of well news have recently hit the USD Coin issuing Circle. Circle Pay’s chief strategy officer and head of global policy, Dante Disparte, quickly denied the speculation, Cointelegraph reported.