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DeFi project Sushi and its lead leader have received a subpoena from the U.S. Securities and Exchange Commission (SEC), according to a forum post. March 21st.
Sushi subpoenas by regulators
A forum post published by Sushi’s “head chef” Jared Gray shows that both he and the project itself recently received an SEC subpoena.
That post proposed setting up a $3 million litigation fund to cover legal costs, funded in Tether’s USDT stablecoin and introduced through a DAO proposal.
Early poll results, which accompanied Gray’s first forum post, show that much of the community favors such a legal fund, with 80% of 21 voters supporting the creation of the fund. indicates that However, that vote is not a decision by his DAO of his Sushi.
The forum post gave few other details about the nature of the subpoena. According to the post, Sushi has no further comment but is cooperating with the SEC.
The value of Sushi’s native cryptocurrency token (SUSHI) fell from $1.22 to $1.15 shortly after the news, marking a loss of around 6.5%.
Can the SEC regulate DeFi?
In theory, decentralized financial projects should resist regulation as there is no central authority to target them.
As such, the sushi community questioned how the sushi itself was summoned. It is not clear whether. Presumably members of the project’s DAO could be summoned, but at least one member of the DAO refused to accept summons.
Sushi is not the first decentralized crypto project to catch the attention of the SEC.of 2021, the SEC took action against the fraudulent DeFi money market. and, 2018the SEC took action against early decentralized exchange Etherdelta and its founders.
The SEC may also be considering other decentralized projects.Unconfirmed rumors flew March 3rd Several DeFi platforms had received Wells notices from the US SEC for an unspecified period of time.
However, Wells’ notice indicates that the SEC intends to take enforcement action, while Sushi’s subpoena only implies an investigation.
