- ‘Head chef’ Jared Grey is seeking $3 million for legal defense from Sushi DAO.
- SUSHI token is down 5% following the summons.
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Sushi DAO and one of its key contributors have been served subpoenas by the US Securities and Exchange Commission (SEC), becoming the first decentralized exchange to face regulatory scrutiny.
‘Head Chef’ Jared Grey, among the subpoenaed, disclosed the summons late Tuesday in a forum post, adding that he was cooperating with the SEC and could not comment publicly on ongoing investigations or other legal matters.
The DAO to set up a legal defense fund
In that regard, Jared proposed that Sushi DAO set aside a legal defense fund of $3 million in USDT with an extra 1 million for use if need be.
‘‘The Sushi DAO Legal Defense Fund will provide coverage for reasonable attorney’s fees and costs for the following parties: core contributors, active since the ratification of Sushi 2.0. (The fund) will make ongoing payments until legal proceedings conclude. If a contributor resigns or is terminated, (the fund) will make ongoing payments until legal proceedings conclude,’’ the announcement noted.
The fund covers legal liabilities related to litigation, inquiries, and any other legal matter that may affect the key contributors to the DAO. The one-off set-up costs for the DAO at the inception were $85-$100,000, with a recurring cost of $10,000.
Sushi token sale would provide 15% of the fund, grants would cover 35%, while the other half would come from Kanpai fees. The breakdown, according to Jared, would maintain the financial solvency of the DAO while considering the immediate need for representation.
The Subpoena is the latest in a string of similar summons by the SEC targeting crypto platforms. In early February, the agency fined crypto exchange Kraken $30 million for operating a staking program the authority felt represented an offer to sell unregistered securities. SEC is also scrutinizing the fall of Terra Luna, UST, and its founder, Do Kwon.
At press time, SushiSwap was changing hands for $1.15 after dropping 4.7% in the past day, according to CoinMarketCap.
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