The Securities and Exchange Commission (SEC) announced today that BarnBridge DAO, a purported decentralized autonomous organization, and its two founders, Tyler Ward and Troy Murray, will pay more than $1.7 million to settle charges that they failed to register the offer and sale of BarnBridge. structured securities of crypto assets known as SMART Yield bonds.
The Commission also charged the respondents with violations arising from the operation of BarnBridge’s SMART Yield Groups as unregistered investment companies.
To settle the SEC charges, BarnBridge agreed to forfeit nearly $1.5 million in sales proceeds, and Ward and Murray each agreed to pay civil penalties of $125,000.
Pursuant to SEC mandates, respondents benchmarked SMART Yield bonds against asset-backed securities and made them widely available to the public. Investors could purchase “Senior” or “Junior” SMART Yield bonds through BarnBridge’s website application. SMART Yield pooled crypto assets deposited by investors and used those assets to generate fixed or variable returns to paying investors.
A BarnBridge white paper, published by Ward, claimed that SMART Yield bonds “will mirror the safety and security of highly rated debt securities offered by traditional finance…while delivering the massive yield” through smart protocols of her contracts.
According to the orders, SMART Yield raised more than $509 million in investment from investors, and BarnBridge received fees from investors based on the size of their investment and their performance selection.
Without admitting or denying the SEC’s findings, BarnBridge, Ward and Murray agreed to cease and desist orders prohibiting them from violating and causing violations of the registration provisions of the Securities Act of 1933 and the Investment Company Act of 1940. The SEC orders report of corrective actions initiated by Ward and Murray.