BarnBridge DAO was advised to cease all work related to the protocol and halt compensation to individual contributors.
Legal counsel Douglas Park also told the team to close existing liquidity pools due to an ongoing investigation by the SEC.
The protocol with over $1.2 million in TVL is the latest target subject of the SEC’s crypto crackdown.
The U.S. Securities and Exchange Commission (SEC) is investigating decentralized finance service BarnBridge as the regulator tightens the noose around cryptocurrency activity in the United States.
BarnBridge DAO Informed Of SEC Probe
Douglas Park who is the duly elected legal counsel to BarnBridge DAO told the team to close existing liquidity pools, cease all work related to the protocol’s product, and pause compensation remitted to individuals for their contribution to the DeFi service.
Park’s Discord message seen on Friday noted that there is limited information on the SEC’s actions against BarnBridge DAO and the team members.
I am letting you know that the Securities and Exchange Commission is investigating Barnbridge DAO and individuals associated with the DAO. Because the SEC’s investigation is ongoing and non-public, I am limited in the information that I will share publicly.
– Douglas Park’s message to the team on Discord.
The DeFi service offers its users a fixed rate on swaps on yield offerings from lenders like Aave. The protocol’s total value locked (TVL) once boasted over $500 million but floated around $1.2 million at press time. BardBridge’s BOND coin fell over 8% on Friday following the news.
America’s Crypto Scene Under The Cosh From SEC Actions
BarnBridge joins a list of crypto entities that the SEC is either investigating or charging with rule-breaking.
Decentralized autonomous organizations are also a contentious topic among U.S. regulators and policymakers. The Commodities and Futures Trading Commission won its case against Ooki DAO in one of the world’s first verdicts against a DAO.
Ooki DAO was ordered to pay $643,542 in penalties and shut down its operation immediately after failing to respond to the CFTC’s allegations in court. The verdict perhaps sets a dangerous precedent for future DAO cases as these decentralized organizations could be held liable as a “person” under the Commodities Exchange Act.