TechFlow reports that the U.S. Securities and Exchange Commission (SEC) has announced a settlement with decentralized finance (DeFi) protocol Rari Capital, Inc. and its co-founders Jai Bhavnani, Jack Lipstone, and David Lucid.
As part of the settlement, Rari Capital and its founders have agreed to a final judgment including permanent injunctions, civil penalties, and disgorgement of ill-gotten gains. The SEC stated it will continue to closely examine the economic realities of crypto products and will not be misled by labels such as "decentralized."
The SEC charged them with misleading investors and conducting unregistered broker activities while operating two blockchain investment platforms, which once held over $1 billion in crypto assets. The SEC alleges that Rari Capital falsely claimed its Earn Pool could automatically rebalance assets and exaggerated investment returns, resulting in significant losses for many investors.
