BarnBridge DAO, which operates a small DeFi protocol, and its founders will pay more than $1.7 million to settle charges brought by the Securities and Exchange Commission over their failure to register cryptocurrency offerings and sales.
The SEC said BarnBridge and its founders Tyler Ward, 34, and Troy Murray, 38, ““The offering and sale of structured crypto-asset securities, known as SMART Yield Bonds,” the SEC said, adding that the DAO sold these bonds to the public against asset-backed securities. name On Friday. BarnBridge did not acknowledge or deny the agency’s findings.
SMART Yield pooled cryptocurrencies deposited by investors and used those assets to generate revenue to pay investors, the SEC said.
“Ward and Murray have used social media to promote the investment potential and returns associated with SMART Yield. Ward and Murray have appeared as guests on several YouTube interview channels related to so-called ‘decentralized finance’ to promote SMART Yield as an investment. I did.” said in order.
SEC probe
Last July, BarnBridge attorney Douglas Park told DAO members via Discord that the SEC inspection. At the time, Park said all work on BarnBridge-related products should stop and that people should not be compensated for work they do for the DAO until further notice.
In late October, BarnBridge vote The process for whether Ward and Murray Must have “the authority to take all actions necessary to comply with the Securities and Exchange Commission’s orders regarding BarnBridge.”
BarnBridge asked stakeholders at the time whether it would have to pay a conversion in accordance with the SEC order and “sell all tokens permitted for sale and allow Ward and Murray to distribute the tokens.”
The SEC took legal action against DAO at the American Crypto Fed earlier this year. Necessary information regarding the company’s management and financial condition was not provided. There were also materially misleading statements and omissions, including discrepancies about whether the tokens were securities, the SEC said.
“The use of blockchain technology to offer and sell unregistered structured finance products to individual investors violates the securities laws,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division. name About BarnBridge on Friday. “This case serves as an important reminder that these laws apply to everyone seeking access to our capital markets, whether consolidated, decentralized or autonomous.”
Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.