Sushi, a Web3 exchange that has pivoted to a decentralized autonomous organization (DAO), is seeking to organize a legal defense fund. If approved, the proposal, which is already up for a vote, would put $3 millionUSDTinto the fund, which has been purchased as part of a fund to defend itself against legal action against the organization and its members. The organization recently disclosed that it received a subpoena from the U.S. Securities and Exchange Commission (SEC).
Sushi DAO Files Proposal to Form Defense Fund
Sushi DAO, a Web3 exchange and staking platform, is seeking support for the establishment of a legal defense fund to effectively address legal matters that have already arisen.20} The proposalhas been approved with 75% support as of this writing and $3 millionof funding can be leveraged by USDTto help its maintainers defend against demands and legal cases.
If approved, the DAO will get 50% of the funds each from the DAO’s treasury, Campay. The other 50% would be deducted from the Sushi fees and from the reserves for giving grants. If depleted, the organization would have to refund the initiative for $1 millionmore until the USDTlegal case is over.
Received undisclosed SEC subpoena
Jared Gray, head chef and main maintainer of Sushi DAO, announced that he had received a subpoena from the U.S. SEC, but declined to reveal the nature of the case facing his organization. When asked about the matter, Gray stated:
Unfortunately, I can’t speak publicly about anything beyond what was disclosed in the posting, but this is standard practice. Many DAOs will require or implement Legal Defense Funds for contributors.
Susi will follow in Makerdao’s footsteps by establishing a legal fund in December to cover similar costs, up to 5 million DAI. However, Makerdao’s proposalis more specific and includes definitions of beneficiaries and claims, a time frame for making payments, and a time frame for determining eligibility for these protections.
This is not the first time a U.S. government agency has taken legal action against a DAO. The Commodity Futures Trading Commission (CFTC) already did so in September andfiled aOoki DAO was illegally offering trading services to U.S. citizens without registering as a Designed Contract Market (DCM); the Ooki DAO case is still ongoing.
What do you think about Sushi establishing a legal defense fund to protect DAO and head chef Jared Gray? Let us know in the comments section below.
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