Crypto lending and stablecoin project BarnBridge is facing legal action from US securities regulators – as well as fines – and may be responding in a new way: a voice of the token holders.
The decentralized finance protocol (DeFi) opened voting Tuesday on a proposal to authorize founders Tyler Ward and Troy Murray to do whatever is 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 stalled in July when they revealed the project was facing an SEC investigation.
It’s not clear what law the project may have broken, but the SEC’s involvement indicates that BarnBridge likely offered some sort of securities product to U.S. investors — at least in the eyes of U.S. investigators. The current DAO vote indicates that the project’s founders intend to comply with regulators’ demands – a prospect that could mean the project is halted.
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. According to public data on two wallets, BarnBridge’s coffers are sitting at over $200,000 worth of various cryptocurrencies. According to the proposal, part of that money is also intended for legal costs.
While BarnBridge isn’t the first so-called decentralized autonomous organization (DAO) to face SEC action, it could be the first to respond by asking the community for permission to move forward.
That said, the vote is a rubber stamp at best. At the time of writing, it had only one selector: “BarnBridge.eth”, a team wallet.
BarnBridge’s attorney did not immediately respond to a request for comment. Neither does the SEC.