SEC Disallows American CryptoFed From Registering 2 Tokens, Gives Reason

The U.S. Securities and Exchange Commission SEC, SEC has officially halted the first legalized decentralized autonomous organization DAO in the country from registering its crypto tokens as securities. The move was based on an allegation that the DAO put out “misleading information” to potential investors.

SEC Says Token Information Insufficient

Back in September, American CryptoFed DAO LLC had filed a Form 10 — used for registering securities for trading on U.S. exchanges, with the SEC. Unfortunately however, the form did not contain enough information about two tokens — Locke and Ducat that the company wants to start issuing, according to the SEC. From SEC’s statement on Wednesday, it could be gathered that some required information about American CryptoFed were also missing from the form.

In July, American CryptoFed became the first decentralized autonomous organization in the U.S. after it registered in Wyoming and then went on being granted legal status thereafter. The company claims to want to introduce a new monetary system to the U.S., and presently runs on the EOS blockchain.

Although DAOs mostly use the Ethereum blockchain to perform its functions, but we’ve seen some popping up on other smart contract-enabled networks.

Wyoming once again proved itself to be a crypto-friendly state back in March, after passing a bill that sees DAOs as limited liability companies. At the time, it was the first state to do so.

It’s actually been a long time since Wyoming has been welcoming crypto companies to the state with open arms. In 2019, it passed a good number of crypto-friendly bills all so it could attract fintech innovations and innovators. Just last year, it also became the first state in the U.S. to issue a crypto banking charter, while Wyoming’s junior senator, Cynthia Lummis, is also well known to be a Bitcoin lover.

Despite all these groundbreaking moves and becoming the first DAO LLC in Wyoming, American CryptoFed has now gotten into trouble with the SEC and may not even be able to issue its tokens at all.