American CryptoFed DAO, the first legally recognized Decentralized Autonomous Organization (DAO) in the U.S., is at risk of losing its registration after the SEC dug up an anomaly dated a Form S-1 registration statement 2021 9 17th.
The Wyoming Secretary of State’s office recognized American CryptoFed as a legal entity in July 2021, when the organization’s CEO, Marian Orr, argued that “Wyoming is arguably the largest blockchain jurisdiction in the world.”
However, on November 18, 2022, the SEC filed administrative proceedings against the DAO to determine a cease and desist order. The SEC’s cease and desist order will revoke the US CryptoFed’s registration and prohibit the sale of internal tokens Ducat and Locke.
according to The SEC’s Enforcement Division said American CryptoFed’s Form S-1 registration statement filed lacked important information, such as audited financial statements and details about its business and management. The SEC further argued that the U.S. CryptoFed filing contained “misleading statements and omissions” while being inconsistent in describing tokens as securities.
In this regard, David Hirsch, head of the Encrypted Assets and Networks Division of the Law Enforcement Department, stated:
“Not only did U.S. CryptoFed fail to comply with the disclosure requirements of the federal securities laws, but they also claimed that the securities transactions they sought to register were not actually securities transactions at all.”
Hirsch clarified that issuers must provide the SEC with required disclosures. However, the SEC claimed that US CryptoFed was not cooperative when reviewing its registration statement.
Based on information provided to the public, Hirsch shared the SEC’s intentions regarding the DAO:
“Law enforcement is seeking to block the registration of American CryptoFed in order to protect investors from misleading information.”
Cointelegraph found that The DAO’s official Telegram channel has been disabled.
However, as of this writing, the removal of the Telegram account has not been linked to the SEC investigation. American CryptoFed has not yet responded to Cointelegraph’s request for comment.
related: State watchdog says US national encryption law should look like New York
The Securities Commission of the Bahamas (SCB) recently ordered the transfer of all digital assets of FTX Digital Markets (FDM) to digital wallets owned by the Commission.
Bahamas Securities Commission Takes Over Assets of FTX Digital Markets Ltd. pic.twitter.com/IzW4PGZSJm
— Securities Commission of the Bahamas (@SCBgov_bs) November 18, 2022
According to an official statement shared by the SCB, the assets were confiscated for “safekeeping”.