Rosen of the US has filed a class-action lawsuit against Balancer

Revisiting the case file

The US-based law firm The Rosen Law Firm has filed a class-action lawsuit against Balancer Labs, the core development team behind the Balancer Protocol, and several related entities and individuals. The lawsuit—filed in the U.S. District Court for the Southern District of New York—alleges violations of federal securities laws stemming from the November 2024 Balancer hack , which resulted in the theft of approximately $7.8 million from liquidity pools.

• Date: November 19–20, 2024

• Amount of losses: ~$7.8 million across multiple weighted liquidity pools.

• Attack method: Re-entry vulnerability in the treasury contract of the protocol combined with fast lending manipulation.

• Response: Balancer Labs has temporarily suspended affected pools, compensated some liquidity providers through treasury and insurance, and deployed upgraded (v3) contracts.

• Post-incident analysis: The public report acknowledges that the vulnerability was included in a previous update and was not detected during audits.

This attack was one of several high-profile DeFi incidents in late 2024, leading to renewed calls for stricter accountability and disclosure standards in decentralized protocols.

The lawsuit, first reported by Law360 and confirmed through court filings dated February 4, 2026, represents a group of investors who purchased or held BAL tokens (Balancer's governance token) during the specific period of 2024 to 2025 and suffered losses allegedly due to serious misinformation and omissions related to the protocol's security.

Securities and investor protection lawsuits

Class-action lawsuits in the cryptocurrency field often revolve around whether tokens or governance rights qualify as securities under U.S. law. If the plaintiffs succeed in classifying the Balancer-related tokens or governance participation rights as investment contracts, the lawsuit may focus on allegations of misrepresentation , omissions, or failure to remedy known vulnerabilities.

Even if the exploitation is due to a technical error rather than intentional wrongdoing, arguments about liability may revolve around the obligation of care and risk management standards.

This lawsuit adds to a growing list of legal actions targeting DeFi platforms following attacks or vulnerability exploitation. Historically, many protocols have relied on decentralization as a shield against legal liability.

Insurance, Risk Management and Allocation

One of the core contradictions in DeFi is who ultimately bears the risk of exploitation – the users, token holders, or developers? Unlike traditional finance, DeFi platforms often lack mandatory insurance or capital reserves. Class action lawsuits introduce a new dimension: redress through litigation rather than the protocol's inherent reimbursement mechanisms.

If such cases gain attention, protocols may face pressure to adopt stronger auditing, public disclosure, and possibly even insurance structures.

This is a crucial time. U.S. regulators and courts are increasingly clarifying the scope of cryptocurrency oversight. Civil litigation complements regulatory enforcement by creating financial consequences independent of agency actions.

Our review

Rosen's class-action lawsuit against Balancer represents a significant escalation in legal pressure on DeFi protocols. By viewing the November hack as part of a broader pattern of security misrepresentations, the lawsuit aims to hold the core team financially accountable under U.S. securities law. Whether BAL will ultimately be considered a security will be watched extremely closely—potentially redefining liability for governance tokens across the industry. Currently, this filing adds another layer of legal and reputational risk to DeFi projects with centralized development teams and public tokens.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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