The SEC on Tuesday served a subpoena on Tuesday to decentralized crypto exchange SushiSwap — presumably regarding concerns over its native token, Sushi.
In a governance proposal released Tuesday afternoon, the DEX said it hopes to sell 15% of its treasury to fund legal defense efforts.
“The international regulatory environment for DAOs remains in flux, and the options for contributor insurance policies remain limited,” Jared Grey, Sushi head chef, wrote in the governance forum Tuesday. “Therefore, we propose Sushi DAO make available a legal defense fund of 3M USDT.
Sushi and Grey were both served, the forum noted.
“We’re cooperating with the SEC,” Grey said in the proposal. “We do not intend to comment publicly on ongoing investigations or other legal matters.”
The proposal received six votes in the first 30 minutes after being published, all of which were in favor of establishing the legal defense fund.
The subpoena is only the latest in a series of recent SEC actions to look into various crypto tokens and projects over concerns of unregistered securities offerings. Ripple has been fighting its case in court over accusations that its XRP token is an unregistered security for more than two years.
When a crypto company is served a subpoena, or a Wells notice, or an enforcement action — and there have been no shortage lately — they need to operate under the assumption that the SEC’s case is already decided, Stuart Alderoty, chief legal officer at Ripple, said.
“The fix is in, and do what you what you need to do to cooperate under the law but don’t fool yourself into believing that you’re going to curry favor with [the SEC] or that you’re going to be able to sway them, because you never will and their goal ultimately will be to crush you or destroy your business,” Alderoty said.
Grey declined Blockworks’ request for comment.
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