The first official decentralized autonomous organization (DAO) in the United States is taking on the Securities and Exchange Commission (SEC) over its 2021 token registrations.
American CryptoFed DAO has told Cointelegraph it will represent itself without an attorney over SEC allegations that it omitted and misstated information in a securities registration last year.
The DAO registered its native, interdependent stablecoin Ducat and governance token Locke in its 2021 filing with the SEC, but the regulator has begun proceedings to issue a stop order citing a raft of problems with the registration.
In correspondence with Cointelegraph, American CryptoFed chief operation officer and organizer Xiaomeng Zhou confirmed that the DAO will argue its case against the SEC without legal representation:
"We just filed the Notice of Appearance according to the SEC’s rules. This letter means that we told the SEC that we will represent ourselves without attorneys in this case."
American CryptoFed has also indicated that it will file a motion to extend the deadline for its answer to the SEC’s Order Instituting Administrative Proceedings. This will open up a 20-day period in which to build its argument against the SEC’s move to stop American CryptoFed’s registration.
Related: Wyoming legally recognizes first DAO in the United States
The DAO’s September 2021 filing outlined the details of the inter-dependent stablecoins named Locke and Ducat, which serve as tools for its proposed Wyoming-based monetary system.
As Cointelegraph previously reported, the Ducat is an inflation and deflation-resistant stablecoin that will be used for daily transactions and as a store of value. Locke is the governance token of the DAO, which is intended to stabilize the Ducat and facilitate the administration of its ecosystem.
These tokens are intended to be used by municipalities, merchants, banks, crypto exchanges and other participants in the DAO.
By registering with the SEC, American CryptoFed would become a reporting company and would have to carry out periodic reporting obligations to the regulatory body.
In its whitepaper, CryptoFed noted that its native ecosystem tokens are intended to be used as utility tokens. The DAO looked to preempt any issues with the SEC by registering both Ducat and Locke tokens as securities to ‘ensure compliance with Securities laws and related regulations.’