BarnBridge DAO, a decentralized autonomous organization, has been instructed to halt all work on the project due to an ongoing investigation by the United States Securities and Exchange Commission (SEC). The news was revealed by Douglas Park, a lawyer representing BarnBridge DAO, in a post on the platform’s Discord channel on July 6. Park urged members to cease all activities related to BarnBridge, including the closure of liquidity pools, in order to minimize potential legal liability.
Following Park’s announcement, co-founder Tyler Ward, known as “Lord Tyler” on Discord, confirmed the veracity of the message. However, neither Park nor Ward provided details as to why the SEC initiated the probe. Park clarified that due to the investigation’s non-public and ongoing nature, only limited information can be disclosed at this time.
The timing of a recent proposal and vote within the DAO suggests that the SEC’s investigation may have begun prior to June 30. Over that period, all BarnBridge (BOND) token holders participated in a vote to retain Park & Dibadj LLP, Park’s law firm, as legal counsel for the DAO. The proposal received overwhelming support, with 94.3% of the votes in favor, predominantly from the wallet “barnbridge.eth.”
Despite the evidence of the SEC investigation, some members of the Discord community expressed skepticism. One member requested supporting evidence of the probe and implied that the founders of BarnBridge may be using it as an excuse to orchestrate an “exit strategy” at the expense of investors. Ward swiftly dismissed these allegations, stating that it would be the “worst thought-out rug attempt in history.” Other members took a more jovial approach, joking about fleeing to Europe or making references to SEC chair Gary Gensler’s strict stance on cryptocurrencies.
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BarnBridge is a cross-platform decentralized finance (DeFi) protocol focused on managing risk associated with inflation and interest rate volatility. Since news of the SEC investigation came to light, the price of the project’s native token, BOND, has declined by 1.9% to $3.12, according to CoinGecko. The token has experienced a significant drop of 98.3% since its all-time high price of $185.7 on October 27, 2020. Currently, it has a market capitalization of $29 million.
The SEC’s recent lawsuits against major exchanges Binance and Coinbase, accusing them of offering unregistered securities, indicates that the regulator is not strictly focusing on larger organizations in the cryptocurrency space. The fact that BarnBridge, a smaller to mid-sized DAO, is also under investigation suggests a broader crackdown by the securities regulator.
Cointelegraph reached out to the SEC for comment but did not receive an immediate response. It is important to note that the investigation is still ongoing, and further details will likely be revealed as the process unfolds.
