Sushi is seeking to create a legal defense fund that would cover legal fees for core contributors. The proposal comes after the decentralized finance project and its head chef were subpoenaed by the U.S. securities and exchange commission (SEC).
Sushi and head chef receive SEC subpoena
Sushi’s head chef Jared Grey made a proposal to the Sushi decentralized autonomous organization (DAO) to establish a legal defense fund worth 3 million USDT.
According to the proposal, the legal defense fund will cover attorney’s fees and cost for the platform’s core contributors who have been “active since the ratification of Sushi 2.0” to date. Grey also suggested that half of the funds will come from Kanpai fees, with the remaining coming from Grants and Sushi.
Meanwhile, if the money depletes from the legal defense fund before the completion of any legal proceedings, the DAO will provide an additional 1 million USDT, if needed. Results from a poll so far show that the majority of the voters are in favor of establishing the legal defense fund.
Grey’s proposal comes in response to a subpoena served by the US SEC to Sushi and the head chef. While the executive did not provide details, Grey said they were cooperating with the American regulator.
U.S. regulators continue clampdown on crypto industry
However, this is not the first time that U.S. regulators are going after a DAO.
In September 2022, the Commodity Futures Trading Commission (CFTC) filed a federal civil enforcement action against Ooki DAO, claiming that the organization, a successor to bZeroX which, along with its founders, was slapped with a $250,000 penalty by the CFTC for unlawfully facilitating illegal trading.
The charges against Ooki DAO were, however, met with criticism from the crypto community and even a CFTC commissioner, Summer Mersinger. In December 2022, a U.S. federal judge ordered the CFTC to sue Tom Bean and Kyle Kistner, bZeroX founders, “in their roles as Ooki DAO token holders” as part of the ongoing lawsuit against the DAO.