SEC investigation prompts BarnBridge DAO to halt operations

BarnBridge DAO, which runs a decentralised finance (DeFi) protocol, has suspended all project-related activities following an alleged probe by the United States Securities and Exchange Commission (SEC).

In a recent announcement on the platform's Discord channel, Douglas Park, the organisation's lawyer, informed members about the ongoing investigation and advised them to pause work on BarnBridge-related projects, including the closure of liquidity pools.

The SEC's inquiry has prompted caution to minimise potential legal liability. While limited details are available regarding the SEC probe, Park acknowledges the alleged SEC's investigation into BarnBridge DAO and individuals associated with it but did not provide specific reasons for the regulatory scrutiny.

Due to the non-public and ongoing nature of the investigation, Park emphasised that sharing extensive information is currently restricted. Co-founder Tyler Ward, also known as "Lord Tyler" at Discord, later confirmed the veracity of Park's message on BarnBridge's Discord platform.

pic.twitter.com/ChsjBuGEzM

— BarnBridge (@Barn_Bridge) July 7, 2023

Proposal to retain legal counsel coincides with SEC probe

Coincidentally, prior to the SEC probe, a proposal was put forth for BarnBridge DAO token holders to retain Park & Dibadj, the law firm managed by Douglas Park, as legal counsel. Between 30 June and 3 July, 100 percent of BarnBridge token holders casted their vote on a proposal to retain Park & Dibadj as their legal counsel.

An overwhelming support was received, with 94.3 percent of the votes casted in favor of the proposal, thus reflecting token holders’ trust in Park's legal expertise. The timing of this proposal suggests that the SEC investigation may have already been underway.

While some members of the Discord community expressed suspicion regarding the SEC's investigation, suggesting potential ulterior motives, Ward dismissed such claims, stating that it would be an ill-conceived attempt to defraud investors.

Others reacted humorously, making light of the situation by suggesting relocation to evade the SEC or playfully referring to SEC Chair, Gary Gensler's tough stance on cryptocurrencies.

BOND token experiences a price drop

Following the news of the SEC investigation, BarnBridge's native token, BOND, saw a 1.9 percent decline in price, reaching $3.12 according to CoinGecko. Since its all-time high which was recorded in October 2020, BOND has suffered a significant decline of 98.3 percent and currently holds a market cap of $29 million.

In short, the response to an alleged probe by the SEC, BarnBridge DAO has paused all operations. The SEC investigation prompted the organisation's lawyer to advice members to cease work on BarnBridge-related projects. Specific details regarding the SEC's inquiry remain undisclosed.

Following the news, BarnBridge's native token, BOND, experienced a 1.9% price drop.