First official DAO in the US to fight SEC without attorneys

Published at: Nov. 21, 2022

The first official decentralized autonomous organization (DAO) in the United States is taking on the Securities and Exchange Commission (SEC) over its 2021 token registrations. 

American CryptoFed DAO has told Cointelegraph it will represent itself without an attorney over SEC allegations that it omitted and misstated information in a securities registration last year.

The DAO registered its native, interdependent stablecoin Ducat and governance token Locke in its 2021 filing with the SEC, but the regulator has begun proceedings to issue a stop order citing a raft of problems with the registration.

In correspondence with Cointelegraph, American CryptoFed chief operation officer and organizer Xiaomeng Zhou confirmed that the DAO will argue its case against the SEC without legal representation:

"We just filed the Notice of Appearance according to the SEC’s rules. This letter means that we told the SEC that we will represent ourselves without attorneys in this case."

American CryptoFed has also indicated that it will file a motion to extend the deadline for its answer to the SEC’s Order Instituting Administrative Proceedings. This will open up a 20-day period in which to build its argument against the SEC’s move to stop American CryptoFed’s registration.

Related: Wyoming legally recognizes first DAO in the United States

The DAO’s September 2021 filing outlined the details of the inter-dependent stablecoins named Locke and Ducat, which serve as tools for its proposed Wyoming-based monetary system.

As Cointelegraph previously reported, the Ducat is an inflation and deflation-resistant stablecoin that will be used for daily transactions and as a store of value. Locke is the governance token of the DAO, which is intended to stabilize the Ducat and facilitate the administration of its ecosystem.

These tokens are intended to be used by municipalities, merchants, banks, crypto exchanges and other participants in the DAO.

By registering with the SEC, American CryptoFed would become a reporting company and would have to carry out periodic reporting obligations to the regulatory body.

In its whitepaper, CryptoFed noted that its native ecosystem tokens are intended to be used as utility tokens. The DAO looked to preempt any issues with the SEC by registering both Ducat and Locke tokens as securities to ‘ensure compliance with Securities laws and related regulations.’

Tags
Decentralization
Adoption
Regulation
Sec
Dao
Stablecoin
Security
Wyoming
Related Posts
Fear of the unknown: A tale of the SEC’s crusade against synthetics
On the opening day of Messari Mainnet 2021, New York City’s long-awaited first crypto conference since the start of COVID-19, reports came blazing in via a viral tweet that the United States Securities and Exchange Commission had served a subpoena to an event panelist at the top of an escalator in broad daylight. While it’s still not entirely clear who was served (or why), this isn’t the first time the SEC has encroached upon the crypto industry in full view of the public. Let’s go back a mere two months. On July 20, 2021, SEC Chair Gary Gensler issued his …
Decentralization / Oct. 23, 2021
Elusive Bitcoin ETF: Hester Peirce criticizes lack of legal clarity for crypto
The crypto sector may be maturing, but regulatory clarity around the treatment of digital assets continues to remain cumbersome. This was recently highlighted by Commissioner Hester Peirce — also known as the United States Securities and Exchange Commission’s (SEC) “crypto mom” — in remarks she made at “The Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?” Peirce began her speech by emphasizing the importance of “regulating the new crypto ecosystem.” While this may be, Peirce also noted that the crypto industry is still in search of an actual regulator. She said: “A …
Decentralization / June 17, 2022
Are stablecoins securities? Well, its not so simple, say lawyers
Recently reported planned enforcement action against Paxos by the United States Securities and Exchange Commission (SEC) over Binance USD (BUSD) has many in the community questioning how the regulator could see a stablecoin as a security. Blockchain lawyers told Cointelegraph said that while the answer isn't black and white, there exists an argument for it if the stablecoin was issued out in the expectation of profits or are derivative of securities. A report from the Wall Street Journal on Feb. 12 revealed that the SEC is planning to sue Paxos Trust Company in relation to its issuance of Binance USD, …
Adoption / Feb. 13, 2023
Crypto pundits gather online to discuss innovation and national security
The George Mason University Antonin Scalia Law School National Security Institute hosted a webinar Wednesday, March 30, titled “Crypto and National Security: How to Validate American Innovation and Verify U.S. National Security.” Journalist Laura Shin moderated the discussion. CEO of the Crypto Council for Innovation Sheila Warren, executive director of Coin Center Jerry Brito, and global managing partner and chief strategy officer of risk compliance and monitoring firm K2 Integrity Juan Zarate were participants. After opening comments, the first of three questions posed to the panel concerned American innovation. Brito expressed hope that crypto would be allowed to develop with …
Adoption / April 1, 2022
Crypto and securities: New interpretation of US Howey test gaining ground
The crypto community celebrated a victory in court on Jan. 30 when the United States Securities and Exchange Commission (SEC) admitted in the remedies hearing of the LBRY case that secondary sales of its LBC coin were not securities sales. John Deaton, who represents Ripple in court in the SEC’s case against it, was so excited that he created a video for his Twitter-hosted CryptoLawTV channel that evening. Deaton, a friend of the court, or amicus curiae, in the case, recounted a conversation he had with the judge that day. “Look, let’s not pretend. Secondary market sales are a problem,” …
Adoption / Feb. 9, 2023