After Jared Gray, the executive chef of the decentralized finance (DeFi) network, issued an announcement, the value of the SUSHI token from SushiSwap decreased by about 5%.
Gray disclosed that the U.S. Securities and Change Fee had recently served a subpoena on him and SushiSwap. (SEC).
When the SEC suspects that a company or specific person may have information relevant to a current investigation or possible violations of securities laws, it typically serves a subpoena. The subpoena requires the recipient to provide documents or give testimony related to the subject of the investigation.
Gray suggested creating a legal protection fund to cover legal costs for the platform’s core contributors in reaction to the subpoena.
He described the plan to create a $3 million Tether (USDT) legal protection fund with the aim of covering various legal costs. SushiSwap is complying with the SEC, according to Gray, and the company has no plans to make any public statements regarding ongoing legal inquiries or other legal matters.
The primary contributors who have actively participated in Sushi 2.0 are ready to receive assistance from the protection fund. Whether or not a contribution is currently not connected to the organisation, the fund will cover legal fees and other related costs during the legal procedures. The funds from the fund will continue until the legal proceedings are over.
In Gray’s plan, the project’s funding sources include Kanpai fees, grants, and SUSHI market sales with the aim of relieving the financial burden while ensuring enough finances for legal costs. The funding strategy aims to take care of the critical legal issues while also preserving the SushiSwap DAO’s financial stability.
Gray’s proposal includes a backup plan for the DAO to make an additional $1 million in USDT available as needed until legal processes are over in the event that the initial funds run out.
In support of his idea, Gray referenced MakerDAO’s present establishment of a similar authorized protection fund as a model.