BarnBridge DAO, a decentralized autonomous organization, has instructed its members to halt all activities associated with the project following reports of an investigation by the United States Securities and Exchange Commission (SEC).
Douglas Park, a lawyer representing the organization, conveyed this information to the members through a post on the platform’s Discord channel on July 6.
To mitigate potential legal liabilities, Park recommended the suspension of all work related to BarnBridge, including the closure of liquidity pools.
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Additionally, individuals were advised not to receive compensation for their involvement in the DAO’s investment endeavors.
Co-founder Tyler Ward, known as “Lord Tyler” on Discord, subsequently confirmed the authenticity of Park’s message on BarnBridge’s Discord platform.
The reason behind the SEC’s probe into BarnBridge DAO was not explicitly stated by Park or Ward.
Park clarified that due to the investigation being ongoing and non-public, only limited details could be shared with the members.
Notably, prior to the SEC investigation, a proposal was put forth to retain the law firm Park & Dibadj, managed by Park himself, as the legal counsel for the DAO.
The proposal was voted on by BarnBridge tokenholders, with an overwhelming majority (94.3%) in favor.
However, some members have expressed skepticism regarding the SEC’s investigation, speculating that the founders may be leveraging it as an excuse for an exit strategy to potentially defraud investors.
Ward refuted these claims, emphasizing the implausibility of such an attempt.
Responses from BarnBridge DAO members on Discord varied, with some jokingly suggesting moving to Europe to evade the SEC’s jurisdiction, while others expressed concerns about the investigation’s impact on their involvement with BarnBridge.
BarnBridge is a decentralized finance protocol aimed at managing risks associated with inflation and interest rate volatility across multiple platforms.
Since news of the SEC investigation broke, the price of BarnBridge’s native token, BOND, has experienced a 1.9% decline, trading at $3.12 according to CoinGecko.
The token’s value has dropped significantly (98.3%) from its all-time high of $185.7 on October 27, 2020, resulting in a current market capitalization of $29 million.
Given the recent SEC lawsuits against major exchanges Binance and Coinbase for alleged unregistered securities offerings, the investigation into BarnBridge DAO, a relatively smaller organization, suggests that the securities regulator is widening its focus beyond just the crypto industry’s largest players.
Cointelegraph reached out to the SEC for comment but did not receive an immediate response.
