According to Techub News, Cointelegraph reported that the U.S. Securities and Exchange Commission (SEC) has reached a settlement with DeFi protocol Rari Capital and its co-founders for allegedly misleading investors and engaging in unregistered brokerage activities.
According to the announcement, the US SEC stated that Rari Capital's Earn and Fuse pools "function similarly to cryptocurrency asset investment funds," allowing investors to deposit cryptocurrency assets into lending pools and earn returns on their investments. The complaint alleges that Rari Capital conducted unregistered securities offers and sales by selling interests in these pools and their bound governance tokens. In addition, the US SEC also stated that Rari Capital and its co-founders Jai Bhavnani, Jack Lipstone, and David Lucid allegedly misled investors into believing that Earn pools would automatically and autonomously rebalance cryptocurrency assets for optimal returns.
The settlement includes various forms of penalties, such as permanent injunctions, civil penalties, forfeiture and interest, and a five-year ban on the co-founders from serving as officers or directors. Rari Capital Infrastructure agreed to the cease and desist order but did not admit or deny the SEC’s findings. The settlement is still subject to court approval.
