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SEC investigation leads to sudden shutdown of DMM project, return of investor assets pending.
Encryption project DMM suddenly announced closure amid investigation
A cryptocurrency project in the United States that received investment from billionaires suddenly announced its permanent closure after operating for less than a year. The project, named DeFi Money Market DAO (DMM), allowed users to earn an annual yield of 6.5% by staking assets.
It is worth noting that just a week before the closure, DMM held a T-shirt design competition, awarding the winner 1000 platform tokens DMG.
The DMM team stated that the reason for the swift closure of the project was "regulatory investigation". They then explained that the project is facing an investigation by the United States Securities and Exchange Commission (SEC).
According to the DMM team, on December 15, 2020, they received a subpoena from the SEC. The subpoena concerns the sale of mToken and DMG tokens, as well as other aspects of the company's business operations.
Despite the project's closure, the legal disputes with the SEC are ongoing. DMM stated that it is developing a plan to return DMG assets to holders, but there is currently no specific proposal.
This event has once again sparked discussions in the industry regarding the regulation of cryptocurrency projects. Regulatory scrutiny in the DeFi sector seems to be intensifying, and project teams need to place greater emphasis on compliance. At the same time, investors should also remain vigilant and carefully assess project risks.