The two founders of BarnBridge DAO and the company will pay the SEC more than $1.7M to resolve claims that they failed to register the offer and sale of the structured crypto asset instruments that BarnBridge was selling.
The Securities and Exchange Commission (SEC) announced in a press release on Friday that BarnBridge DAO, along with its two founders, Troy Murray, and Tyler Ward, will pay more than $1.7M for not registering the offer and sale of BarnBridge’s SMART Yield bonds, which are their own brand of structured crypto asset securities.
Additionally, BarnBridge and its two founders are accused by the SEC of operating as unregistered investment entities in connection with the operation of BarnBridge’s SMART Yield pools.
Through the BarnBridge website, investors could purchase “Junior” or “Senior” SMART Yield bonds. Investor-provided cryptocurrency assets were pooled by the SMART Yield system, which then used these assets to provide either fixed or variable returns to pay investors.
According to the orders, SMART Yield received investments from a variety of investors totaling more than $509M. These investors paid fees to BarnBridge, the amount depending on the size of the investment and the yield choice chosen.
Director of SEC Division of Enforcement Gurbir S. Grewal, said, “The use of blockchain technology for the unregistered offer and sale of structured finance products to retail investors runs afoul of the securities laws. This case serves as an important reminder that those laws apply to all who wish to access our capital markets, regardless of whether they are, or purport to be, incorporated, decentralised, or autonomous”.
The BarnBridge DAO already decided in October to abide by orders the SEC may issue and to pay fines if they become required. Additionally, voters authorised the DAO’s treasury to “sell all tokens that it is permitted to sell” if it becomes necessary, while it is uncertain if that will be necessary as part of the SEC case decision.
BarnBridge and its founders have been accused of marketing SMART Yield bonds widely to the general public and comparing them to asset-backed securities.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
