The United States Securities and Exchange Commission (SEC) has sent a subpoena to Sushi DAO. The move is yet another by the authorities against DeFi and DAOs.
DeFi giant Sushi DAO revealed on March 21 that the United States Securities and Exchange Commission (SEC) had served it with a subpoena.
‘Head Chef’ Jared Grey, who was put into this CEO role in October 2022, is also a subpoena target.
Sushi Setting Up a Fund
In response, Grey put forward a proposal to establish a legal defense fund that would cover legal costs for core contributors. In the post, he described the need for the funds, which amounts to $3 million,
“The international regulatory environment for DAOs remains in flux, and the options for contributor insurance policies remain limited. Therefore, we propose Sushi DAO make available a legal defense fund of 3M USDT. This fund will cover legal costs regarding inquiries, litigation, and other issues targeting core contributors…it has become evident funds must be available to handle legal needs for operational continuity and to protect core contributors.”
The vast majority have voted in favor of establishing the legal defense fund, with 79% saying yes. Less than a day has passed since the DEX put up the proposal, so it currently doesn’t offer a clear picture of the final outcome.
Sushi DAO is cooperating with the SEC, according to the proposal. Still, the SUSHI token took a hit after the news, though it has since recovered. The token is currently hovering at around $1.17.
US Agencies Targeting DAOs
DAOs are becoming a major target for U.S. authorities. In recent times, several such entities have been targeted. The United States Commodity Futures Trading Commission (CFTC) sued Ooki DAO last year, claiming that it illegally offered crypto derivative products.
The SEC has also gone after CryptoFed DAO, a legally recognized DAO in Wyoming.
These actions have not been well received by the crypto community, who call it an “egregious example of regulation by enforcement.” As it stands, the SEC and CFTC are keen on clamping down on the crypto market.
Sushi Focusing on DEX
Sushi has also had its fair share of developments 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. Generally, DEXs consume more gas than other DeFi products.
Whether any legal troubles will hinder Sushi’s plans for 2023 remains to be seen. For the moment, the team is moving along with its game plan.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
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