SEC Halts Token Registration for First Legally Recognized DAO

American CryptoFed, a DAO that gained legal status in Wyoming, allegedly put “misleading” information on an SEC filing. Read the full article by: Mathew Di Salvo

Key Points:

• In Wyoming earlier this year laws were passed saying that DAOs could operate as LLCs in the state. Many projects have started to build such as City DAO, which is buying land and putting it on the blockchain to attempt running a decentralized city, and American CryptoFed.

• The first legally recognized DAO, American CryptoFed, is having their token sale halted as the SEC is now saying they put out “misleading information” to investors. The SEC also says that they failed to report legally required information when they were registering.

• “The SEC’s order institutes administrative proceedings to determine whether it is necessary and appropriate for the protection of investors to deny or suspend the effective date of American CryptoFed’s registration of the ‘Ducat’ and ‘Locke’ tokens,” the SEC clarified in its statement.

• DAOs make it possible to spread out control and governance to the token holders in order to get away from a central government controlling all the decisions. The goal of American CryptoFed was to introduce a new monetary system where the token holders of the DAO would be in control of how the money flows.