In response to an investigation by the United States Securities and Exchange Commission (SEC), BarnBridge DAO has instructed its members to halt all work related to the project. Douglas Park, a lawyer representing the decentralized autonomous organization, informed members of the probe in a Discord channel post on July 6. He advised the suspension of BarnBridge-related activities, including the closure of liquidity pools, to mitigate potential legal liabilities. Co-founder Tyler Ward confirmed the veracity of Park’s message.
The reason behind the SEC’s investigation into BarnBridge DAO remains undisclosed, as it is an ongoing and non-public matter. However, some speculation suggests that the investigation may have started prior to June 30, based on a proposal voted on by token holders during that period. The proposal aimed to retain Park & Dibadj LLP, the law firm where Park serves as the managing partner, as legal counsel for the DAO.
While some members expressed suspicions about the announcement and raised concerns about potential fraud, Ward dismissed these claims. Members reacted differently, with some making lighthearted comments and others expressing more serious concerns. Notably, the price of BarnBridge’s native token BOND dropped by 1.9% since the news emerged.
The SEC’s scrutiny of BarnBridge DAO, a relatively smaller decentralized organization, suggests that the regulator is not solely targeting larger players in the cryptocurrency industry. This comes after recent SEC lawsuits against major exchanges Binance and Coinbase for allegedly offering unregistered securities.
BarnBridge DAO is a cross-platform DeFi protocol designed to address inflation risk and interest rate volatility. Following the announcement of the SEC probe, the value of its BOND token decreased by 98.3% from its all-time high in October 2020. The token currently holds a market capitalization of $29 million.
Please note that Cointelegraph’s attempt to seek comment from the SEC did not yield an immediate response.