BOND, the native asset of BarnBridge, has declined by 5.69% in the last 24 hours after news of the SEC’s investigation into the team’s operations broke out.
A lawyer representing the DeFi protocol, Douglas Park shared the information via Discord.
“I’m Douglas Park, duly elected legal counsel to Barnbridge DAO. I am letting you know that the Securities and Exchange Commission is investigating Barnbridge DAO and individuals associated with the DAO,” he said.
He expressed strong caution against the continuation of work on Barnbridge and compensation of individuals. He also advised the team to close liquidity pools. Park said he could not share much details regarding the investigation because it was on-going and undisclosed to the public.
The crypto community found itself divided as the latest target of the SEC’s scrutiny received mixed reactions. While some members called for solidarity and support, others voiced suspicions of foul play.
These suspicions stemmed from a recent poll conducted by DAO members, which involved voting on the retention of Park & Dibadj LLP, a law firm owned by Douglas Park, as their legal representative.
The poll outcome raised eyebrows, as it resulted in an overwhelming 100-0 vote in favour of Park’s firm. Furthermore, it was notable that 94.3% of the 213,000 votes in support of Park’s firm came from a wallet registered under the name ‘barnbridge.eth’.
These circumstances sparked questions and concerns within the community about potential irregularities or conflicts of interest surrounding the voting process.
Like the twitter users above, many believe that the latest development is part of the team’s plan to orchestrate a rug pull using the SEC investigation as a front.
There has been no further updates from the team on the matter.
SEC continues pursuit, targeting smaller DeFi protocols
The SEC has been hot on the heels of crypto companies lately, with Coinbase and Binance being the major subjects of attack. It sued both companies for violating securities law, including facilitating trade of assets which it labels securities.
Its case against XRP is nearing its conclusion, and its outcome could potentially establish a significant precedent for the classification of other 68 altcoins that have been labelled as securities by the regulatory watchdog.
Despite having its hands full with ongoing cases with industry heavyweights, the SEC has not shown any signs of halting its pursuit of crypto companies as is evident in its alleged investigation into BarnBridge.