SUSHI is down over 9% at the time of writing
SushiSwap plans to establish a legal defense fund to "cover legal costs for core contributors and multisig participants."
Read more: Horse Allegedly Gets Fingered so SushiSwap Tanks… Cos Crypto
Its DAO proposal aims to make 3 million USDT available for the legal fund with a contingency that would make another 1 million USDT available if the intial funds deplete.
Following the disclosure, SushiSwap's SUSHI token fell over 5% in an hour from $1.22 to $1.14. At the time of writing SUSHI is priced at $1.06.
DAOs have been under the scrutiny of financial authorities. In September, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Ooki DAO. The court ultimately ruled that the CTFC needs to serve specific individuals of the DAO, not the DAO as a whole.
SEC vs. Crypto
The SEC has been hot on the heels of the crypto industry. Last month, the SEC declared that crypto staking services violate security laws.
However, in the beginning of March, the Commodity Futures Trading Commission (CFTC) stated that Ether and stablecoins should be treated as commodities.
Read more: Sorry SEC, Stablecoins Are Commodities According to CFTC
“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view,” Behnam said. “It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity."
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