Sushi DAO and Head Chef Jared Grey were served with a subpoena by the U.S. Securities and Exchange Commission, the decentralized autonomous organization revealed Tuesday.
Grey proposed creating a "Sushi DAO Legal Defense Fund" in a forum post, saying it would "cover legal costs for core contributors." The proposal recommends making $3 million in tether (USDT) available for core contributors, with another $1 million worth of USDT available in case the initial $3 million are used up.
"We’re cooperating with the SEC. We do not intend to comment publicly on ongoing investigations or other legal matters," the forum post said.
Under the proposal, the fund would pay for attorneys' fees and other costs for any core contributors who have been part of the project since April 2022, when "Sushi 2.0" was ratified. The funds would be paid out until any legal proceedings are ended.
One of the initial comments on the forum post asked how the DAO known as Sushi was subpoenaed, with the user saying they did not receive it despite being a member of the DAO.
The sushi token dropped by 5.5% on the news, and is currently changing hands at $1.156 after falling from a peak of $1.216.
UPDATE (March 21, 2023, 17:17 UTC): Adds additional detail.