The United States Securities and Exchange Commission (SEC) has sent a subpoena to Sushi DAO. This is yet another move by the authorities against DeFi and The DAO.
DeFi giant SushiDAO revealed on March 21 that it was served with a subpoena by the United States Securities and Exchange Commission (SEC).
Jared Gray, the ‘head chef’ who has been placed in this CEO role in October 2022, is also a summons target.
Sushi set up a fund
In response, Gray proposed setting up a legal defense fund that would cover legal costs for key contributors. In the post, he described the need for funds, which amounts to $3 million,
“The international regulatory environment for The DAO remains in flux, and contributor insurance policy options remain limited. Therefore, we propose to make available a legal defense fund of 3M USDT to the Sushi DAO. Target will cover legal costs regarding other issues … It has become clear that funds must be available to meet legal requirements and protect key contributors for operational continuity.
An overwhelming majority voted in favor of establishing a Legal Defense Fund, with 79% saying yes. Less than a day has passed since the DEX made the offer, so it currently does not offer a clear picture of the final outcome.
SUSHI DAO is cooperating with the SEC regarding the motion. Nevertheless, Sushi Token took a hit following the news, although it has since recovered. The coin is currently hovering around $1.17.
US agencies are targeting The DAO
The DAOs are becoming a prime target for the US authorities. Several such organizations have been targeted in the recent past. The United States Commodity Futures Trading Commission (CFTC) sued Ooki DAO last year, claiming it illegally offered crypto derivative products.
The SEC is also pursuing CryptoFed DAO, a legally recognized DAO in Wyoming.
These actions have not been well received by the crypto community, who call it a “glaring example of regulation by enforcement”. As it stands, the SEC and CFTC are keen to crack down on the crypto market.
Sushi Focusing on DEX
Sushi has also seen its fair share of development in recent times. The DeFi platform shut down its lending product in January, shifting its focus to its DEX. SushiSwap is one of the highest consumers of gas on Arbitrum. Typically, DEXs consume more gas than other DeFi products.
Whether any legal trouble will hinder Sushi’s plans for 2023 remains to be seen. As of now, the team is moving ahead with its game plan.
disclaimer
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.