Sushi DAO Faces SEC Investigation, Calls For $3 Million Legal Defense Fund
- Sushi DAO is proposing a 3M USDT legal defense fund to cover legal costs for core contributors.
- The fund will provide coverage for reasonable attorneys’ fees and costs for contributors, active since the ratification of Sushi 2.0 to the present.
- The DAO will make 1M USDT available, as needed, until legal proceedings conclude to ensure operational continuity.
Sushi DAO proposes a 3M USDT legal defense fund for core contributors to cover legal costs and ensure operational continuity.
Sushi DAO has proposed the establishment of a legal defense fund of 3 million USDT to cover legal costs for core contributors. The international regulatory environment for DAOs remains in flux, and the options for contributor insurance policies remain limited. As such, funds must be made available to handle legal needs for operational continuity and to protect core contributors.
The Sushi DAO Legal Defense Fund will provide coverage for reasonable attorneys’ fees and costs for core contributors, active since the ratification of Sushi 2.0 to present. Disbursements will occur until legal proceedings conclude, even if a contributor resigns or is terminated.
The funds will come from a combination of Kanpai fees (50%), grants (35%), and Sushi TWAP market sells (15%). This breakdown limits the financial burden while providing the needed funds for legal expenses, protecting Sushi DAO’s financial solvency, and addressing the immediate need for representation.
If funds deplete, the DAO will make 1 million USDT available, as needed, until legal proceedings conclude. The DAO will receive financial disclosures per the Governance Dashboard (coming Q2 23).
Recently, MakerDAO provided a similar legal defense fund for their contributors. DAOs must execute similar proposals to help manage liability for core contributors.
Sushi DAO is currently cooperating with the SEC after being served with a subpoena. They have not commented publicly on ongoing investigations or any other legal matters. The proposed legal defense fund is a proactive step toward protecting core contributors and ensuring operational continuity.
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