SEC Subpoenas Sushi And Head Chef Jared Grey
Decentralized finance (DeFi) company Sushi has been served a subpoena by the Securities and Exchange Commission (SEC), along with its “head chef” Jared Grey, the company announced on Tuesday. Sushi’s legal defense fund, aimed at covering costs related to the SEC’s inquiry, will be funded with $3 million USDT, which Grey requested from the Sushi DAO.
The SEC recently served Sushi and "head chef" Jared Grey with a subpoena. Jared Grey is seeking a $3 million legal defense fund from Sushi DAO. TheBlockhttps://t.co/ffH2cZlEJR
— Wu Blockchain (@WuBlockchain) March 22, 2023
Legal Defense Fund
Sushi had sought to establish a legal entity to reduce liability for contributors and the DAO last year. The legal defense fund will cover “reasonable” attorney fees and costs for core contributors who have been active since the ratification of Sushi 2.0.
Grey, in a blog post, stated that the SEC’s inquiry required funds to be available to handle legal needs for operational continuity and protect core contributors. Sushi is cooperating with the SEC, but has no intention to comment publicly on ongoing investigations or other legal matters, he added.
Possible Securities Violations
The SEC has not yet responded to requests for comment on the matter. This incident has caused concern in the DeFi community, particularly as the SEC has been increasing its scrutiny of cryptocurrency and DeFi platforms. The SEC is likely to be looking into whether Sushi violated securities laws or engaged in any other unlawful practices.
The Sushi DAO Legal Defense Fund will be funded through a combination of Kanpai fees, grants, and Sushi. The DAO has also made $1 million USDT available in case the funds run out before the legal issues are resolved.
This incident highlights the need for DeFi platforms to be vigilant about complying with regulations, as the SEC is ramping up enforcement actions against crypto and DeFi companies. DeFi has been a rapidly growing sector, and companies must ensure that they are taking all necessary precautions to avoid legal problems.