The SEC settles with BarnBridge DAO for $1.7 million
The Securities and Exchange Commission (SEC) has reached a settlement with BarnBridge DAO and its founders, Tyler Ward and Troy Murray. The SEC stated that the decentralized autonomous organization and its founders will pay over $1.7 million for failing to register the offer and sale of their structured crypto asset securities, known as SMART Yield bonds.
The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, emphasized that securities laws apply to all market participants, even those claiming decentralization or autonomy. He stated that using blockchain technology for the unregistered offer and sale of structured finance products to retail investors violates securities laws.
The SEC found that BarnBridge’s SMART Yield bonds were marketed as asset-backed securities and offered to the public. The bonds attracted over $509 million in investments, and BarnBridge earned fees based on investment size and chosen yield.
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SEC’s actions against issuers and trading platforms
The SEC has been taking swift enforcement action against decentralized organizations and crypto issuers. Notable cases include actions against Kraken, Coinbase, Binance, and Bittrex for operating unregistered exchanges, highlighting the SEC’s focus on compliance with securities laws.
The SEC has also been cracking down on fraudulent activities and unregistered offerings in the crypto market. They have brought charges against Woodbury and Holverson in the CoinDeal scheme, as well as Richard Heart’s Hex, PulseChain, and PulseX for unregistered offerings.
The SEC has targeted insider trading and market manipulation within the crypto market as well. Former Coinbase manager Wahi and others were charged with insider trading, while Terraform Labs and its founder Do Hyeong Kwon were charged with orchestrating a multi-billion dollar fraud. Samuel Bankman-Fried was charged with defrauding equity investors in FTX.
Hot Take: SEC’s enforcement actions leave no room for non-compliance
The SEC’s settlement with BarnBridge DAO and its founders is another example of their commitment to enforcing securities laws in the crypto space. Market participants, including decentralized organizations and issuers, must ensure compliance to avoid penalties and legal consequences. The SEC’s actions against various platforms and individuals demonstrate their determination to crack down on unregistered exchanges, fraudulent activities, insider trading, and market manipulation. This regulatory oversight aims to protect retail investors and maintain the integrity of the crypto market. It is crucial for all crypto participants to understand and adhere to securities laws to foster a safe and transparent ecosystem.
