BarnBridge Faces SEC, Seeks Token-holder Opinion
U.S. securities regulators have launched legal action against crypto lending and stablecoin initiative, BarnBridge. In an unprecedented move, the project is seeking direction from its token-holders on how to respond. The decentralized finance (DeFi) protocol began a voting process for a proposal that empowers founders Tyler Ward and Troy Murray to take all necessary actions to adhere to the Securities and Exchange Commission’s order, including possible “disgorgement” payments.
Established to create fixed-income products for seasoned crypto investors, BarnBridge's operations were halted in July, disclosing an ongoing SEC investigation. While the exact nature of the potential violation remains ambiguous, the SEC's involvement suggests that the project might have offered securities to U.S. investors. The ongoing vote reveals the founders' inclination to fulfill regulatory requirements, which might even lead to the project's closure.
The proposal considers the liquidation of the treasury to enable Ward and Murray to distribute the tokens, although the recipients remain unspecified. Current records show that BarnBridge's treasury holds over $200,000 in various cryptocurrencies. The proposal also earmarks a portion of these funds for legal costs.
BarnBridge's situation is unique; while it's not the first decentralized autonomous organization (DAO) to confront SEC action, it may be the pioneering entity to consult its community on the way forward.
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