{"id":182557,"date":"2021-02-19T06:38:37","date_gmt":"2021-02-19T03:38:37","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/defi-money-market-closure-after-sec-probe-could-set-rocky-precedent\/"},"modified":"2021-02-19T06:38:37","modified_gmt":"2021-02-19T03:38:37","slug":"defi-money-market-closure-after-sec-probe-could-set-rocky-precedent","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/defi-money-market-closure-after-sec-probe-could-set-rocky-precedent\/","title":{"rendered":"# DeFi Money Market closure after SEC probe could set rocky precedent"},"content":{"rendered":"<p>&#8220;<strong># DeFi Money Market closure after SEC probe could set rocky precedent <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvODRkODk2MWUtNjlkNi00ZDQwLTkxNDItNWMwNjk5Mjc2YTQxLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>The SEC\u2019s recent inquiry into the Tim Draper-backed DeFi Money Market<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/app.defimoneymarket.com\/\"> platform<\/a> is the most recent example in a concerning trend of increasing action by regulators against unregistered securities.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">As a result of regulatory inquiries, DMM is ceasing operations. mTokens can be redeemed with interest accrued to-date through the following link: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/mWB1WacKaH\">https:\/\/t.co\/mWB1WacKaH<\/a><\/p>\n<p>\u2014 DMM DAO (@DMMDAO) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/DMMDAO\/status\/1357812538084360196?ref_src=twsrc%5Etfw\">February 5, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>It joins Kik Interactive, Ripple and Coinseed as crypto projects facing the wrath of regulators under\u00a0 aspects of securities law. <\/p>\n<p>The mystery behind DeFi Money Market\u2019s abrupt closure on Feb. 5 was unveiled in the project\u2019s official Telegram<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.me\/DmmOfficial\"> channel<\/a> on Feb. 9, in a statement that revealed the DeFi Money Market Foundation received an investigative subpoena from the United States Securities and Exchange Commission on December 15, 2020.<\/p>\n<p>\u201cWe reviewed the subpoena carefully and with the assistance of counsel began complying with the legal requirement to produce documents and make other information available to the SEC,\u201d the post said. <\/p>\n<blockquote><p>\u201cWe have begun negotiations with the SEC staff to resolve its investigation, and in an effort to reach a mutually agreeable resolution, we have concluded that an orderly wind-down of the project is best.\u201d<\/p><\/blockquote>\n<p>Without providing many specifics, the statement also assured that investor assets held by the DeFi Money Market \u2014 such as DAI, USDC, USDT, or ETH \u2014 would be returned to customers \u201cas soon as possible.\u201d<\/p>\n<p>The DeFi Money Market project was initially designed to allow cryptocurrency traders and investors access to tokenized, real-world assets. The public sale for DMG, the governance token used by the DMM DAO,<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/DMMDAO\/status\/1275976227422003202\"> concluded<\/a> in Jun. 2020 after raising $6.5 M in ETH in less than 48 hours.<\/p>\n<p>It has been plagued with problems since its inception, with the initial sale riddled with swap errors and scammers capitalizing on the confusion. The DMM team had initially<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/DMMDAO\/status\/1357812538084360196\"> described<\/a> the platform\u2019s closure as the \u201cresult of regulatory inquiries.&#8221;<\/p>\n<p>Trenchant cryptocurrency critic and admin of the Buttcoin sub<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">reddit<\/a> David Gerard said in a post the action shows the SEC is indeed ramping up efforts to prosecute DeFi-related projects based in the U.S. <\/p>\n<p>He argues this is because \u201cDeFi is pretty blatantly a security in the U.S.\u201d and that related tokens fit the criteria of a security as defined by the<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/corpfin\/framework-investment-contract-analysis-digital-assets\"> Howey Test<\/a>. Gerard points to previous administrative<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/litigation\/admin\/2017\/33-10445.pdf\"> orders<\/a> by the SEC, in which an ICO was deemed to constitute sales of unregistered securities, as the \u201ctemplate\u201d for future prosecution efforts.<\/p>\n<p>While the action is concerning, DeFi projects that have more fully decentralized governance may be viewed differently and it remains to be seen how regulators and courts will <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roach such projects.<\/p>\n<p>Several other non-DeFi cryptocurrency projects have been unfortunate enough to have been targeted by the SEC recently. <\/p>\n<p>On Jan. 24, a New York district court ruled in favor of the SEC\u2019s motion for summary judgment against Kik Interactive, which raised approx. $100 million in token sales in 2017.<\/p>\n<p>In Dec. 2020, the SEC made public their lawsuit against Ripple, alleging its founders of raising $1.3 billion in the sales of unregistered securities.<\/p>\n<p>In Feb. 2020, the SEC filed charges against Steven Seagal for his role in promoting a 2018 ICO. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">With Gensler on board as the SEC chair, it\u2019s a great <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> to Bitcoin and a handful other PoW coins that are self-evident to be non security <\/p>\n<p>But not a good news to many other alts, fair launched or not <\/p>\n<p>Just my 2c<\/p>\n<p>\u2014 Dovey \u201cRug The Fiat\u201d Wan (@DoveyWan) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/DoveyWan\/status\/1360179039764316164?ref_src=twsrc%5Etfw\">February 12, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>And in New York, news emerged yesterday that the State Attorney <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a> is suing crypto trading platform Coinseed for <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.businessinsider.com.au\/crypto-platform-coinseed-sued-by-new-york-and-sec-for-selling-worthless-tokens-2021-2?r=US&amp;IR=T\">defrauding <\/a>investors with its ICO under the Martin Act.<\/p>\n<p>While investment-related operations of the platform have been removed, DMM users can still access their accounts and redeem tokenized assets for their underlying counterparts.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/defi-money-market-closure-after-sec-probe-could-set-rocky-precedent\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# DeFi Money Market closure after SEC probe could set rocky precedent &#8221; The SEC\u2019s recent inquiry into the Tim Draper-backed DeFi Money Market platform is the most recent example in a concerning trend of increasing action by regulators against unregistered securities. As a result of regulatory inquiries, DMM is ceasing operations. mTokens can be&#8230;<\/p>\n","protected":false},"author":1,"featured_media":182558,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvODRkODk2MWUtNjlkNi00ZDQwLTkxNDItNWMwNjk5Mjc2YTQxLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[87262,74868,80041,74891,75036,76656,75034,74898,77796,70934,71745],"class_list":["post-182557","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-crowdfunding","tag-defi","tag-digital-assets","tag-ethereum","tag-ico","tag-kik","tag-ripple","tag-sec","tag-tim-draper","tag-regulation","tag-venture-capital"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/182557","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=182557"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/182557\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/182558"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=182557"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=182557"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=182557"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}