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Members of the BarnBridge DAO have been instructed to pause all activities related to the project following news of an investigation by the United States Securities and Exchange Commission (SEC).
Douglas Park, a lawyer representing the decentralized autonomous organization, revealed the SEC probe in a post on the platform’s Discord channel on July 6. To minimize potential legal liability, Park advised that all work on BarnBridge-related products, including the closure of liquidity pools, should cease. He also stated that individuals should not receive compensation for their work linked to the DAO’s investment efforts.
Tyler Ward, co-founder of BarnBridge and known as “Lord Tyler” on Discord, later confirmed the veracity of Park’s message.
While the reasons for the SEC’s investigation were not disclosed, Park explained that due to the ongoing and non-public nature of the investigation, only limited information could be shared.
Earlier, between June 30 and July 3, all BarnBridge (BOND) tokenholders voted in favor of retaining Park & Dibadj, a law firm where Park serves as the managing partner, as legal counsel for the DAO.
Some members of the DAO expressed skepticism regarding the announcement, suggesting ulterior motives or potential fraudulent intentions by the founders. However, Ward dismissed these claims and stated that such an exit strategy would be poorly executed.
Other members reacted with humor, joking about hiding from the SEC or making references to the regulatory authority’s strict stance on cryptocurrencies.
BarnBridge is a decentralized finance protocol that aims to address inflation risk and interest rate volatility. Following news of the SEC investigation, the price of its native token BOND has fallen by 1.9% to $3.12, according to CoinGecko. The token has experienced a significant decline since its all-time high of $185.7 on October 27, 2020, and currently has a market cap of $29 million.
The SEC’s reported investigation into BarnBridge, a mid-sized DAO, suggests that the regulatory body is not solely targeting the largest organizations in the crypto space.
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