**News Flash: SEC Settles with Rari Capital Over Misleading Investors**

The SEC has reached a settlement with DeFi protocol Rari Capital and its co-founders for allegedly misleading investors and unregistered broker activity.

- **Allegations**: The SEC claims Rari's Earn and Fuse pools operated like crypto investment funds, offering unregistered securities and misrepresenting the automatic rebalancing of assets.

- **Accusations**: Co-founders Jai Bhavnani, Jack Lipstone, and David Lucid are accused of misleading investors and acting as unregistered brokers.

- **Settlement**: Includes permanent injunctions, civil penalties, disgorgement with interest, and a five-year officer/director ban for the co-founders. Rari Capital agreed to a cease-and-desist order without admitting or denying the findings.

Rari Capital, launched in 2020, faced significant challenges, including major hacks in 2021 and 2022, leading to its eventual shutdown. The settlement is pending court approval.