Sushi DAO Subpoenaed by SEC: Legal Defense Fund Proposal

SEC Subpoena and Legal Defense Proposal

The United States Securities and Exchange Commission (SEC) has issued a subpoena to Sushi DAO, the decentralized autonomous organization behind the prominent DeFi crypto exchange, SushiSwap. In response, SushiSwap's Head Chef Jared Grey, who also received a subpoena, has proposed the creation of a $3 million legal defense fund. This fund aims to cover legal expenses arising from SEC inquiries and potential litigation, safeguarding the DAO and its core contributors.

Fund Structure and Community Response

The proposed legal defense fund is designed to offer financial support for core contributors involved with SushiSwap from the ratification of Sushi 2.0 until the subpoenas were delivered. The fund is planned to be housed in a new multisig account, ensuring the availability of resources for legal representation as required. Funding sources include Kanpai fees, which will contribute 50%, grants providing 35%, and the remaining balance through the TWAP (Time-Weighted Average Price) market selling of the SUSHI token.

The Sushi community largely supports the creation of this fund, although there is notable opposition due to the unclear details surrounding the subpoenas. This proposal has coincided with a decline in the SUSHI token, which has dropped over 4%, currently trading at $1.15.

Market Impact and Future Considerations

The establishment of a legal defense fund reflects the increasing need for DAOs to prepare for regulatory scrutiny. As the SEC intensifies its focus on DeFi platforms, SushiSwap’s proactive approach may set a precedent for other decentralized entities. The impact on the SUSHI token highlights the volatility and challenges faced by crypto markets in response to regulatory developments.