The Securities and Exchange Commission has settled charges with BarnBridge DAO and its two founders, BarnBridge DAO Troy Murray and Tyler Ward, according to a statement by the Commission. Barnbreige will pay approximately $1.7 million in a penalty regarding allegations that Smart Yield Bonds, a digital asset, was not registered properly with the SEC.
The SEC also charged the respondents with violations stemming from operating BarnBridge’s SMART Yield pools as unregistered investment companies.
The penalty includes the disgorgement of $1.5 million in proceeds from sales and a $125,000 civil penalty.
The SEC claims that Smart Yield bonds were asset-backed securities that were marketed to the public. Investors could purchase “Senior” or “Junior” Smart Yield bonds through BarnBridge’s website application. Smart Yield bonds apparently pooled crypto assets deposited by the investors and used those assets to generate fixed or variable returns to pay investors.
BarnBridge allegedly claimed the Smart Yield bonds “mirror the safety and security of highly-rated debt instruments offered by traditional finance…while still providing the outsized return” through its smart contract protocols.
The SEC states that Smart Yield bonds attracted more than $509 million in investments from investors, and BarnBridge was paid fees by the investors based on the size of their investment and their choice of yield.
Without admitting or denying the SEC’s findings, BarnBridge, Ward, and Murray agreed to cease-and-desist orders. The SEC also orders reference remedial actions initiated by Ward and Murray.
