US charges Rari Capital over DeFi securities and broker activities involving $1B

The U.S. Securities and Exchange Commission (SEC) announced on Wednesday a settlement with Rari Capital, Inc., a decentralized finance (DeFi) protocol, and its co-founders. The SEC had charged Rari Capital with misleading investors and engaging in unregistered broker activities related to two blockchain-based investment platforms that collectively managed crypto assets valued at over $1 billion.

According to the SEC’s statement, Rari Capital also settled charges for conducting unregistered offerings of three securities connected to these platforms. Rari Capital Infrastructure LLC, which assumed operational responsibilities from Rari Capital in 2022, was also found to have engaged in unregistered securities offerings and broker activities, and has settled those charges as well.

Monique C. Winkler, director of the SEC’s San Francisco regional office, emphasized the agency’s approach, stating, “We will not be deterred by someone labeling a product as ‘decentralized’ and ‘autonomous’ but instead will look beyond the labels to the economic realities, as we did here, and hold the individuals behind crypto products and platforms accountable when they harm investors and violate federal securities laws.”