The U.S. Securities and Exchange Commission (SEC) has stopped Wyoming-based decentralized autonomous organization (DAO), CryptoFed, from registering its two tokens Locke and Ducat over alleged “misleading” information on an SEC filing.
CryptoFed touts itself as the first legal DAO out of Wyoming after the state passed a heavily debated law allowing DAOs to seek state charter and official recognition as limited liability companies.
In an S-1 filed with the SEC in September, CryptoFed formally requested recognition from the regulator, and attempted to register its two tokens. The group registered to use the tokens in a secondary market and refundable auctions at sales above initial value.
Locke was supposedly set to be used for governance, while Ducat was for transactions. The SEC alleges CryptoFed failed to “contain certain required information about the two tokens as well as about American CryptoFed’s business, management, and financial condition, including audited financial statements,” in a form it filed.
The SEC also deemed the form had “inconsistent statements” about whether the tokens were securities. Administrative proceedings will now follow to determine whether to deny the registrations.
Source: https://www.cryptocompare.com/email-updates/daily/2021/nov/11/
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