BarnBridge DAO, a risk management entity within the decentralized finance (DeFi) space, is under investigation by the U.S. Securities and Exchange Commission (SEC). The news broke out through Douglas Park, the legal representative of BarnBridge, who urged the cessation of all activities linked to the organization on their Discord channel last week.
Park, a lawyer who BarnBridge only appointed a week prior, warned the members to halt work on all products related to the DAO, discontinue any ongoing compensations, and shut down existing liquidity pools to minimize the risk of further legal ramifications.
Tyler Ward, BarnBridge co-founder, backed the authenticity of Park’s statement but refrained from commenting further on the subject.
However, this tight-lipped approach from BarnBridge’s representatives left the DAO members and the wider cryptocurrency community in the dark regarding the exact nature and reasons for the SEC probe. The investigation into the individuals associated with BarnBridge, though unanticipated, signals the SEC’s more assertive stance on crypto regulatory oversight, extending beyond centralized exchanges.
The ripples of investigation on BOND’s value
The repercussions of the probe are already visible in BarnBridge’s market performance. The value of BOND, the native token of BarnBridge, witnessed a sharp 9.3% dip within 24 hours of the announcement, sinking to $3.01, according to CoinGecko’s data.
Launched in 2020, BarnBridge offers an innovative solution for tokenizing risks and dealing with market volatility. It had soared to a total value of approximately $574.9 million in November 2020. However, following the recent development, its value tumbled to a mere $1.35 million, a drastic plunge indicative of the investigation’s impact on investor sentiment.
The changing crypto regulatory landscape
The SEC’s latest move comes in the wake of its lawsuits against industry giants Binance and Coinbase last month. By turning its attention towards a relatively smaller entity like BarnBridge, the SEC exhibits an escalating vigilance towards all echelons of the crypto industry.
Despite some DAO members casting aspersions on the investigation and suspecting it as a potential “exit strategy,” the majority supported the decision to retain the Park & Dibadj LLP law firm, reflecting trust in the founders and an understanding of the need for legal counsel.
However, the ongoing investigation’s outcomes and their implications for BarnBridge, its community, and the wider DeFi sector remain shrouded in uncertainty.
