BarnBridge DAO Halts All Work on DeFi Protocol in Response to SEC Investigation

Following a reported investigation by the United States Securities and Exchange Commission (SEC), BarnBridge DAO has instructed its members to pause all work related to the project.

In a Discord channel post on July 6, Douglas Park, a lawyer representing the decentralized autonomous organization, informed members about the SEC’s investigation into BarnBridge DAO and individuals associated with it. Park advised suspending all activities, including the closure of liquidity pools, to mitigate potential legal liabilities. He also suggested that individuals should not receive compensation for work linked to the DAO’s investment efforts.

Shortly after Park’s message, co-founder Tyler Ward, known as “Lord Tyler” on Discord, confirmed the authenticity of the news on BarnBridge’s Discord channel.

While the exact reasons behind the SEC’s probe into BarnBridge DAO were not disclosed by Park and Ward, they mentioned that due to the ongoing and non-public nature of the investigation, only limited information could be shared.

Before the SEC’s investigation came to light, BarnBridge token holders voted on a proposal to retain the services of the law firm Park & Dibadj LLP, where Park serves as the managing partner, for legal counsel. The vote was held between June 30 and July 3, with an overwhelming majority of 94.3% supporting the retention of the law firm.

Despite the announcement of the SEC’s investigation, some members of the DAO expressed skepticism. One member requested supporting evidence of the SEC’s involvement and suggested that the founders might be using it as an excuse for an “exit strategy” to potentially defraud investors. Ward dismissed the claim, calling it the “worst thought-out rug attempt in history.”

Other members responded humorously to the news, with one suggesting it’s time to move to Europe to evade the SEC’s reach, while another made a lighthearted remark about SEC Chair Gary Gensler’s strict stance on cryptocurrencies.

BarnBridge is a decentralized finance (DeFi) protocol that focuses on cross-platform risk management, aiming to address inflation risk and interest rate volatility.

Since news of the investigation emerged, the price of BarnBridge’s native token, BOND, has experienced a 1.9% decline to $3.12, according to CoinGecko. The token has experienced a significant decrease of 98.3% from its all-time high of $185.7 on October 27, 2020, and currently has a market capitalization of $29 million.

It is noteworthy that the SEC’s reported investigation into BarnBridge, a smaller-scale DAO, suggests that the securities regulator may not solely be targeting larger organizations within the cryptocurrency space.

CryptoGrafos reached out to the SEC for comment but did not receive an immediate response.

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