According to TechFlow, the U.S. Securities and Exchange Commission (SEC) announced a settlement with the 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 agreed to accept a final judgment including a permanent injunction, civil penalties, and the return of ill-gotten gains. The SEC said it would continue to examine the economic realities of crypto products and would not be confused by labels such as "decentralization."
The SEC accused them of misleading investors and engaging in unregistered brokerage activities while operating two blockchain investment platforms. These platforms once held more than $1 billion worth of crypto assets. The SEC said Rari Capital falsely claimed that its Earn pool could automatically rebalance assets and exaggerated investment returns, causing a large number of investors to lose money.
