‘SEC investigation’ leads Ethereum DeFi protocol BarnBridge to order halt

BarnBridge legal counsel has urged all work to stop amid a non-public SEC investigation into the DAO

article-image

Mark Van Scyoc/Shutterstock modified by Blockworks

share

DeFi protocol BarnBridge says it has drawn attention of the US Securities and Exchange Commission (SEC), although has stopped short of explaining exactly what for.

In a Discord screenshot, later tweeted by BarnBridge’s official handle, elected legal counsel Douglas Park said the DAO and associated individuals were under SEC investigation.

“Because the SEC’s investigation is ongoing and non-public, I am limited in the information that I will share publicly,” Park said. The update was later confirmed by BarnBridge CEO Tyler Ward.

BarnBridge products, powered by Ethereum, focus on tokenizing risk exposure. They aim to provide crypto users new ways to hedge their positions. Blockworks has reached out to BarnBridge for comment.

In a bid to reduce further legal liability, BarnBridge is shutting all existing liquidity pools (deployed to Ethereum, Arbitrum and Optimism) while restricting the creation of new ones, per the statement. About $1.2 million is currently in those pools.

All work on BarnBridge products should also cease, Park warned, adding that individuals would no longer be compensated for any work related to the project “until further notice.”

Loading Tweet..

BarnBridge DAO, which is governed by BOND token holders, recently elected to retain Park as legal counsel in a Snapshot vote on Monday. BOND is down almost 10% following the investigation disclosure.

BarnBridge co-founder Tyler Ward tweeted Friday that he is leaving crypto.

Loading Tweet..

The development is the latest in a string of actions taken against crypto firms, including within the DeFi sector.

The Commodities Futures Trading Commission last year targeted margin-focused DeFi platform Ooki DAO, a case which it won by default judgment in June. Experts say that outcome only has limited power to set precedent.

Last month, the SEC labeled a number of cryptocurrencies securities including algorand (ALGO), decentraland (MANA), polygon (MATIC) and dash (DASH) as part of cases filed against crypto exchanges Coinbase and Binance.

Intercontinental Exchange-owned Bakkt delisted solana (SOL), MATIC and cardano (ADA) shortly after. Crypto-friendly neobank Revolut followed suit for US users.

Update, July 7, 2023 at 1:05 pm ET: Added tweet from BarnBridge co-founder.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screenshot 2024-05-23 091855.png

Research

Bitcoin L2s aim to boost scalability while preserving decentralization and security, unlocking a better user experience, and new avenues for Bitcoin-powered innovations. However, no existing Bitcoin L2 leverages the full security of Bitcoin.

article-image

Sponsored

As part of the #Breakout2024 plans, Radix has introduced Token Trek

article-image

House members ask Gensler to keep a “consistent and equitable approach” with ether ETF proposals after the agency approved spot bitcoin ETFs in January

article-image

Using old-world instruments to address crypto user experience challenges goes against what this industry set out to do

article-image

And, weeks of a potential crypto ETF decision are no stranger to chaos

article-image

The FIT21 Act marks the second crypto-focused piece of legislation to advance in Congress this month

article-image

More than half of Solana transactions fail