First US DAO to battle SEC without lawyers
Luisa Crawford Nov 22, 2022 01:00
In its 2021 SEC filing, the DAO listed its native, interdependent tokens — the stablecoin Ducat and governance token Locke. The regulator has started the process of issuing a stop order, citing a slew of issues with the registration. American CryptoFed plans to file a motion to extend the deadline for responding to the SEC's Order Instituting Administrative Proceedings.
Concerning the 2021 token registrations, the first legally recognized decentralized autonomous organization (DAO) in the United States has launched a lawsuit against the Securities and Exchange Commission (SEC).
The Decentralized Autonomous Organization (DAO) registered its native, interdependent tokens in the 2021 filing that it submitted to the SEC. These tokens included the stablecoin Ducat and the governance token Locke. Despite this, the regulatory body has started the legal proceedings necessary to seek a stop order, citing a broad variety of problems with the registration.
In addition to this, American CryptoFed has announced that it would be taking legal action to push out the deadline for the submission of its response to the order that the SEC issued to initiate administrative proceedings.
It will now have a window of opportunity of twenty days during which it may craft its response against the SEC's request to stop the registration of American CryptoFed because of this development.
In its file dated September 2021, the DAO explains how the Locke and Ducat toks, which are instruments for the DAO's intended money system headquartered in Wyoming, work together. The month of September 2021 is shown on this paper.
The DAO participants, which may include governments, commercial firms, financial institutions, cryptocurrency exchanges, and other types of organizations, are the intended users of these tokens. If American CryptoFed were to register with the Securities and Exchange Commission (SEC), then it would become a reporting corporation and be required to fulfill its requirements to make periodic reports to the regulatory body. If this registration were to take place, then American CryptoFed would be subject to the obligations outlined in this sentence.
As stated in the company's white paper, CryptoFed intends for the native ecosystem tokens that it distributes to be put to use in the capacity as utility tokens when they are put into circulation.
The goal of the DAO was to "ensure compliance with the Securities Act and related regulations." to head off any possible disputes with the Securities and Exchange Commission by registering both Ducat and Locke as securities (SEC).
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