BarnBridge DAO, a cross-platform risk management decentralized finance (DeFi) protocol, has suspended all activities following an investigation by the United States Securities and Exchange Commission (SEC).
BarnBridge DAO Faces SEC Probe
In a recent post on Discord, the project’s legal counsel Douglas Park notified users about the probe into the decentralized organization and associated individuals.
To reduce potential further liabilities, Park advised halting operations on BarnBridge, including closing existing liquidity pools, pausing all work related to the project, and refraining from compensating anyone for any work they do on the platform until further notice.
BarnBridge is a cross-platform risk management protocol that attempts to mitigate the risks associated with DeFi, such as inflation risk and interest rate volatility. With BarnBridge v2, users can earn a fixed return on their deposits by swapping variable APYs from money markets for a fixed APY.
The latest notice from Park was confirmed by BarnBridge’s co-founder Tyler Ward, also known as Lord Tyler. Both Park and Ward did not disclose why the BarnBridge is being investigated or what the probe is all about.
However, Park stated that since the investigation is ongoing, only limited information can be publicly shared.
A Coincidence?
Interestingly, before the SEC probe was made public, BarnBridge token holders voted to retain the law firm Park & Dibadj LLP, led by Park, as legal counsel for the DAO. 94.3% token holders voted in favor of retaining the law firm.
The timing of the proposal and investigation have raised a lot of concerns among customers of BarnBridge. One user stated that the project founders might be using the announced investigation as an excuse for an exit strategy to potentially defraud investors. Ward responded by saying it will be the “worst thought-out rug attempt in history.”
Meanwhile, BarnBridge native token, BOND, reacted to the latest developments. At the time of writing, the token was trading at $3.02, down by nearly 10% on the day.
