BarnBridge is the latest cryptocurrency project to find itself embroiled in legal proceedings initiated by the US Securities and Exchange Commission (SEC). With potential financial penalties looming, the project turned to token holders.
Details of any specific order sent by the financial regulator were not disclosed.
Voters decide what the SEC “orders.”
The DeFi protocol began the voting process on October 10, centered around a proposal to allow its creators — Tyler Ward and Troy Murray — the authority to take any actions needed to ensure compliance with SEC directives, among other things.
Voters voted unanimously in favor of the proposal, which also includes paying all clearance amounts required by potential SEC demands and authorizing BarnBridge’s legal counsel, Douglas Park, to sign the final version of the order on behalf of the project.
Voters also support the Treasury Department to reimburse all of Park’s bills related to the investigation as well as divesting all tokens she was allowed to sell and allowing Ward and Murray to distribute them.
The DAO’s recent vote signals the founders’ intent to abide by the regulator’s requests. This course of action essentially indicates a complete termination of its operations.
The fall of Barnbridge
BarnBridge describes itself as a platform that “offers interest rate swaps allowing any variable yield to be exchanged for a fixed rate.” However, several related products, such as liquidity pools, were discontinued in July to reduce potential additional legal liability after the Securities and Exchange Commission opened an investigation against them.
At that time, Park, who was elected as BarnBridge DAO’s legal counsel, He said That the SEC’s investigation was “nonpublic” in nature. He has also said that all work on products related to the protocol should cease immediately and that individuals should not be compensated for the work they do for the DAO until further notice.
Since then, BarnBridge’s native coin, BOND, has lost nearly 50% of its value. Cryptocurrency exchange Coinbase later suspended trading of BOND on its platform in August.
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