BarnBridge DAO Settles with SEC Over Unregistered Crypto Asset Offering

The Securities and Exchange Commission (SEC) has announced a settlement with BarnBridge DAO and its founders, Tyler Ward and Troy Murray in another enforcement action.

BarnBridge DAO will pay $1.7 million

In a statement on Friday, the SEC said 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.

Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, emphasized the applicability of securities laws to all market participants, including those claiming decentralization or autonomy. He stated, “The use of blockchain technology for the unregistered offer and sale of structured finance products to retail investors runs afoul of the securities laws.”

The regulator said that BarnBridge’s SMART Yield bonds were marketed as asset-backed securities and offered to the public.

The SEC’s findings indicate that the SMART Yield bonds attracted over $509 million in investments. BarnBridge also earned fees based on the investment size and the chosen yield by each investor.

The parties have neither admitted nor denied the SEC’s findings but have agreed to cease-and-desist orders.

SEC actions against issuers and trading platforms

The SEC has been prompt with its enforcement action against decentralized organizations and crypto issuers. Notable cases include actions against Kraken and Coinbase for operating unregistered exchanges. Binance and Bittrex faced similar charges, highlighting the SEC’s focus on ensuring compliance with securities laws.

The SEC’s crackdown on fraudulent activities and unregistered offerings has been extensive. High-profile cases include charges against Woodbury and Holverson in the CoinDeal scheme and Richard Heart’s Hex, PulseChain, and PulseX for unregistered offerings.

The SEC has also targeted insider trading and market manipulation within the crypto market. This includes charges against former Coinbase manager Wahi and others for insider trading. Terraform Labs and its founder Do Hyeong Kwon were charged with orchestrating a multi-billion dollar fraud. Samuel Bankman-Fried was also charged with defrauding equity investors in FTX.

Also Read: SEC and FSS to Discuss Cryptocurrency Regulations in January