- DeFi Money Market has joined the list with Kik Interactive, Ripple, and Coinseed
- DMM’s closure is due to the investigative subpoena from the US SEC
- The action of the US SEC seems it wants to prosecute all the US-based crypto projects
DeFi Money Market (DMM) backed by Tim Draper, an investor and founder of Drapper Associations. Earlier this month the US Securities and Exchange Commission (SEC) put an inquiry on the DeFi platform. Following the inquiry an official tweet confirmed its shutdown because of the inquiry.
The latest inquiry being performed by the US SEC, is a new example of a concerning trend of increasing regulatory enfprcements’ actions against unregistered securities. Indeed, the concern began with the unexpected closure of an investment platform, who’s outcome might affect the US crypto projects.
DeFi Money Market closure is no more a mystery
On 5th February 2021, the DeFi Money Market was abruptly closed. After a few days, following the project’s Telegram channel a statement revealed that the project has received an investigative subpoena from the US SEC in December 2020. According to the official statement, the DMM project reviewed the subpoena carefully. Moreover, with assistance of counsel it began complying with the legal requirements to produce documents to the regulator.
Simultaneously, the team behind the DMM project had begun to negotiate with the US SEC staff. As the team is willing to resolve the investigation, putting an effort to reach a mutually agreeable resolution.
The action of SEC seems it wants to prosecute DeFi projects
Since the inception of the DeFi Money Market, the project is observed being plagued wiith problems. According to David Gerard, the blockchain and cryptocurrency author, the latest action of the US SEC seems the regulator is iramping up efforts to indict the US-based DeFi projects. Additionally, DeFi has become a pretty blatantly a security in the nation where relating tokens fits in the criteria of a security.
Where action of the regulator is concerning, fully decentralized projects are being viewed differently. It needs to be observed how the regulators and courts will approach such projects. On the other hand, several other non-DeFi crypto projects have also been targeted by the SEC. Hence, the latest actions have joined Kik Interactive, Ripple, and Coinseed crypto projects showing the wrath of the SEC under aspects of securities laws. Indeed, with Gary Gensler as the new chair of the regulatory body, it’s great news for leading cryptocurrency, but not good for several other altcoins.
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