SEC Calls Out! DeFi Protocol BarnBridge Team Under SEC Investigation, Legal Advisor: Operations Suspended

Accusations against centralized exchanges (CEX) are still ongoing, and now there are reports of a DeFi project being targeted by the U.S. Securities and Exchange Commission (SEC).

SEC Attempts to Crack Down on Other Cryptocurrency Areas

According to a screenshot shared on Twitter by BarnBridge, a tokenized risk derivatives protocol, the legal advisor of Barnbridge DAO, Douglas Park, claimed that the SEC is investigating Barnbridge DAO and related individuals. In order to reduce further legal liability, they will close existing liquidity pools and will not reopen them.

He also called for all work related to Barnbridge products to stop. Furthermore, due to the non-public nature of the investigation and limited information, project founders Tyler Ward and Troy Murray will temporarily refrain from commenting on the incident.

Shortly after, Tyler confirmed this news in their Discord community.

Adam Cochran, a partner at crypto venture Cinneamhain Ventures, stated that the SEC seems to be targeting smaller DeFi projects and speculated that the SEC will try to charge them for launching structured product securities without registration.

Discord Community of BarnBridge in Disarray

According to Cointelegraph's report, some DAO members have questioned the announcement.

A member of the BarnBridge Discord community expressed skepticism, stating that services should not be shut down based solely on a screenshot and text. They demanded evidence proving the SEC's involvement in the investigation and hinted that BarnBridge's founders might use this as an excuse to deceive investors and conduct a Rug Pull.

Another member mentioned, "It's time to move to Europe," indicating fleeing the United States as a way to escape what they perceive as unreasonable pressure from the SEC.

Previously, Gurbir Grewal, head of enforcement at the SEC, had stated in mid-June that:

The originally planned "progressive enforcement actions" seemed ineffective in regulating the cryptocurrency industry rife with violations, so the SEC must and will change strategies.

There are concerns that the SEC's crackdown may no longer be limited to CEX but gradually expand to various DEX or DeFi protocols.

What is BarnBridge

BarnBridge is a DeFi protocol specializing in tokenized risk and volatility derivatives, providing investors with personalized risk preference settings and solving interest rate fluctuation issues.

According to CoinGecko's data, the price of its native token $BOND was affected by this news, dropping by about 9% in a single day. However, since breaking its all-time high price of $185.7 in October 2020, the token has fallen by over 98%, dropping 86% in the past year, with a current market value of around $28 million.