SushiSwap CEO answers questions about the SEC subpoena he received

Jared Grey, the CEO of the SushiSwap decentralized exchange, stated recently that he no longer feels inspired following a wave of regulatory crackdowns aimed at digital currency platforms. The regulators have been cracking down on centralized and decentralized exchanges, including SushiSwap itself.

The move has put a lot of pressure on the digital currency industry, as he admitted in an AMA on March 30th.

SushiSwap in legal trouble with the SEC

During the AMA, Grey opened up about what he thinks and feels regarding the US regulators, as well as the state of the industry in general. He said, “It really feels like over this last cycle that the majority of that feeling [of excitement] is gone now. Look at what’s going on on the regulatory side of things. Like this morning, Senator [Elizabeth] Warren [was] stating she’s putting together an anti-crypto army to regulate the space into obedience.”

I’m in this fight to put our government on the side of working families. Join our re-election campaign today: https://t.co/KuZwvrwkqT pic.twitter.com/fCUcqE9PZM

— Elizabeth Warren (@ewarren) March 29, 2023

Grey’s comments came about a week after he revealed that both he and Sushi DAO were served a subpoena from the US SEC. This was a part of the regulator’s effort to reign in the sprawling digital currency sector.

Grey did not share the details of the subpoena, but this could still mean that the protocol will be involved in its own expensive and potentially long legal battle against the SEC, similar to what Ripple has been going through over the last two years. The move came after the regulator stepped up its efforts to exercise even more stringent oversight over the companies in the crypto industry.

Of course, SushiSwap is not like the majority of cryptocurrency companies. It operates using smart contracts, which is what makes it a decentralized exchange or a DEX. Meanwhile, exchanges like Coinbase or Binance are centralized firms. Grey does help with the governing, but the decisions involving the project are made by the token holders, who submit and vote on proposals.

Grey proposes a legal defense fund

With the expected battle ahead of him, Grey proposed the community reserve $4 million of the funds in the protocol’s treasury for the project’s legal defense fund. This quickly led to a backlash, as the fund would be almost the same as the DAO’s annual operating expenses.

Then, in the second half of the community call, Grey was asked to offer more information about the subpoena, but he once again refused to talk about it. He said that he was advised by legal not to talk about it in detail. Instead, he was recommended to only explain the situation and note that it is being dealt with and leave it at that.

While the community seemed to accept this, some have still insisted on getting to know the details if they are going to help fund the legal defense. Several users have voted that Grey should step down rather than fight the regulator.