coindesk.com
Crypto lending and stablecoin project BarnBridge is facing legal action from U.S. securities regulators – as well as fines – and it’s responding perhaps in a novel way: a token-holder vote.
The decentralized finance (DeFi) protocol opened voting Tuesday on a proposal to authorize its founders Tyler Ward and Troy Murray to do whatever’s necessary to comply “with the Order of the Securities and Exchange Commission,” including the payment of “disgorgement.”
BarnBridge sought to build fixed-income products for savvy on-chain crypto investors. But the team’s efforts stopped in July when they revealed the project faced an investigation from the SEC.
It’s not clear what law the project may have broken but the SEC’s involvement indicates BarnBridge was likely providing some sort of securities product to U.S. investors – at least in the eyes of U.S. investigators. The current DAO vote indicates the project’s founders intend to comply with regulators’ demands – a prospect that could mean shutting down.
The proposal includes provisions that would liquidate the treasury “and allow Ward and Murray to distribute the tokens,” although it does not say to whom. BarnBridge’s treasury sits above $200,000 in various cryptocurrencies according to public data on two wallets. Some of that cash is also earmarked for legal expenses by the proposal.
While BarnBridge isn’t the first so-called decentralized autonomous organization (DAO) to face SEC action, it may well be the first to respond by asking its community for permission to proceed.
That said, the vote is at best a rubber stamp. It only had one voter at press time: “BarnBridge.eth,” which is a team wallet.
BarnBridge’s lawyer did not immediately respond to a request for comment. Neither did the SEC.