On July 6, Douglas Park, an attorney representing the decentralized autonomous organization BarnBridge, shared important news with members through the platform’s Discord channel. Park revealed that the Securities and Exchange Commission (SEC) had launched an investigation into the BarnBridge DAO and the people associated with it.
In an effort to mitigate potential legal liability, Park said it should cease all work on BarnBridge-related products, including the closure of liquidity pools.
In addition, he suggested that individuals should not be compensated for their contributions resulting from the DAO’s investment activities.
Shortly after Park’s message, co-founder Tyler Ward, aka ‘mr tyler‘ on Discord, confirmed the accuracy of the information on BarnBridge’s Discord platform.
While Park and Ward did not explicitly explain the motive behind the SEC investigation into the BarnBridge DAO, Park clarified that because the investigation is ongoing and not public, only limited information can be shared at this time.
Speculations Rise Among DAO Members in Response to Announcement
After the announcement, a number of BarnBridge DAO members expressed skepticism regarding the SEC investigation. A member of the Discord platform requested corroborating evidence of SEC involvement and hinted that the BarnBridge founders may be using the investigation as a pretense to orchestrate an “exit strategy” that could defraud investors.
Tyler Ward, however, dismissed this claim, stating that it would be the “worst thought-out carpet attempt ever”, implying that such intentions were unsubstantiated.
Some members took a more light-hearted approach to the news, with one suggesting it was time to move to Europe, humorously implying that DAO members could evade SEC scrutiny.
Another member jokingly commented that anyone who would have compromised with BarnBridge would face dire consequences, joking that SEC Chairman Gary Gensler would “shoot” them on live TV, alluding to Gensler’s perceived strict stance on cryptocurrency. .
The Impact of SEC Lawsuits on BarnBridge’s Native Cryptocurrencies and Previous SEC Lawsuits
Following news of the investigation, BarnBridge’s native token BOND saw a 9.4% drop and its price dropped to $3.02, CoinGecko shows.
BOND is now down 98.3% from its all-time high of $185.7 on October 27, 2020, and currently has a market capitalization of just $28 million.
BONDUSD daily chart | Source: TradingView
This is not the only time the regulator has come down on crypto companies, as the SEC recently made headlines for launching litigation against two industry-leading exchanges, Binance and Coinbase, for allegedly providing unregistered securities.
The reported investigation into BarnBridge, a moderately sized DAO, may indicate that the securities regulator is expanding its scrutiny beyond the largest entities within the cryptocurrency space. This development raises questions about the breadth of the SEC’s focus within the industry.
Twitter Featured Image, Tradingview.com Chart
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