On July 6, Douglas Park, a lawyer representing the BarnBridge decentralized autonomous organization, shared important news with the members via the platform’s Discord channel. Park disclosed that the Securities and Exchange Commission (SEC) had initiated an investigation into BarnBridge DAO and individuals associated with it.
In an effort to mitigate potential legal liabilities, Park advised that all work on BarnBridge-related products, including the closure of liquidity pools, should cease.
Additionally, he suggested that individuals should not receive compensation for their contributions resulting from the DAO’s investment activities.
Shortly after Park’s message, co-founder Tyler Ward, also known as ‘Lord Tyler‘ on Discord, confirmed the accuracy of the information on BarnBridge’s Discord platform.
While the reason behind the SEC’s probe into BarnBridge DAO was not explicitly explained by Park and Ward, Park clarified that due to the investigation being ongoing and non-public, only limited information could be shared at this time.
Speculations Arise Among DAO Members In Response To Announcement
Following the announcement, a number of BarnBridge DAO members expressed skepticism regarding the SEC’s investigation. One member on the Discord platform requested substantiating evidence of the SEC’s involvement and insinuated that BarnBridge’s founders might be using the investigation as a pretext for orchestrating an ‘exit strategy’ that could potentially defraud investors.
Tyler Ward, however, dismissed this claim, asserting that it would be the “worst thought-out rug attempt in history,” implying that such intentions were baseless.
Some members adopted a more light-hearted approach to the news, with one suggesting that it was time to relocate to Europe, humorously implying that DAO members could potentially evade scrutiny from the SEC.
Another member playfully remarked that anyone who had engaged with BarnBridge would face dire consequences, jesting that SEC Chair Gary Gensler would ‘shoot’ them on live television, alluding to Gensler’s perceived strict stance on cryptocurrencies.
The Impact Of SEC Lawsuits On BarnBridge Native Crypto And Previous SEC Lawsuits
Following the emergence of the news about the investigation, the native token of BarnBridge, BOND, experienced a decline of 9.4%, with its price dropping to $3.02, CoinGecko shows.
BOND is now down 98.3% from its all-time high of $185.7 on October 27, 2020, and presently has a market cap of only $28 million.
This is not the only time the regulator is coming for crypto firms as the SEC recently made news for launching litigation against two leading industry exchanges, Binance and Coinbase, for purportedly providing unregistered securities.
The reported investigation into BarnBridge, a DAO of moderate size, may indicate that the securities regulator is extending its scrutiny beyond the larger entities within the cryptocurrency space. This development raises questions about the breadth of the SEC’s focus within the industry.
Featured image from Twitter, chart from Tradingview.com