SushiSwap and its CEO Faces SEC Subpoena, proposes legal defense fund

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Key Takeaways:

  • The SEC issued a subpoena to a decentralized cryptocurrency exchange likely due to issues with its native token, Sushi. 
  • Following a statement, the price of SushiSwap’s SUSHI token dropped by about 5%.

An executive at the peer-to-peer trading and lending network Sushi revealed on Tuesday that the Securities and Exchange Commission had served the company with a subpoena.

Head Chef Jared Grey made a statement on the Sushiswap forum earlier today, saying that they were presently working with the statutory body. To ” encompass the legal costs of core contributors” who have been involved since the adoption of Sushi 2.0, the executive is additionally recommending the establishment of a legal defense fund. In April 2022, the 2.0 reorganization plan was put forth. 

Following the revelation, the price of SushiSwap’s SUSHI token dropped 5%, dropping from $1.22 to $1.14 in just one hour, according to CoinGecko. 

The subpoena is just the most recent in a line of SEC enforcement actions, which also include fining cryptocurrency exchange Kraken for its staking product and filing a lawsuit against Do Kwon, the creator, and CEO of Terraform Labs, for alleged securities fraud. The SEC had not yet disclosed that it had served subpoenas on Grey or Sushi as of Monday afternoon. 

The SEC has taken a number of disciplinary steps in recent months, including imposing penalties on cryptocurrency exchange Kraken for its staking product, and Robinhood faces SEC probe The subpoena is just the most recent of these.

The choices for contributor insurance policies are still restricted, and the global regulatory landscape for DAOs is still in flux, according to Tuesday’s posting by head sushi chef Jared Grey in the governance forum. As a result, we suggest Sushi DAO create a 3M USDT legal defense fund.

If funds run out, the DAO will make 1 million USDT available as required until the end of the legal process. According to the Governance Dashboard, the DAO will receive money disclosures. (coming Q2 23).

The plan has already received 850 views. Questions about the SEC subpoenaing Grey in order to initiate enforcement action against a DAO were voiced by Test1, a member of the DAO. Smart contracts are typically used in these companies to support an open governance framework without the need for a centralized authority.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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