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Crypto Project Backed by Billionaire Tim Draper Shutting Down Amid Scrutiny From SEC

A US-based crypto project backed by billionaire venture capitalist Tim Draper is ceasing operations less than a year after its token launch.

DeFi Money Market DAO (DMM), which allowed users to earn 6.5% APY on specific staked assets, has announced a sudden and permanent shutdown.

Just one week prior to the news, the company held a T-Shirt design contest for which the prize would be 1,000 of the platform’s native DMG tokens.

Originally, the team cited “regulatory inquiries” as the reason for its quick shutdown, but the team has provided a more detailed explanation for the decision, revealing that the project was facing scrutiny from the U.S. Securities and Exchange Commission (SEC).

“In response to recent questions from our community, we are providing additional information about the decision to wind-down the project.

On Dec. 15, 2020, DMM received an investigative subpoena from the United States Securities and Exchange Commission (SEC).”

According to the DMM team, the SEC inquired about the sale of its mTokens and DMG tokens as well as other aspects of its business operations.

Though the company chose to shutter its doors, its case with the SEC is still ongoing.

As for the fate of DMG owners, DMM is working on a plan to return DMG assets to holders, but no such framework is currently in place.

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