Regulatory storm hits, DeFi project DMM announces permanent closure.

Recently, a cryptocurrency project in the United States, supported by well-known investors, announced its permanent closure, attracting widespread attention in the industry. This project, named DeFi Money Market DAO (DMM), had been in operation for less than a year since its launch before suddenly announcing its cessation of operations.

The main business of DMM is to provide users with services for earning returns on staked assets, promising an annualized return rate of up to 6.5%. However, just a week before the project's closure, DMM was still organizing a T-shirt design competition, with a reward of 1000 platform native tokens DMG, which stands in stark contrast to the subsequent sudden closure.

Regarding the reason for the closure, the DMM team initially mentioned "regulatory investigation" in a vague manner. They later revealed that the project is facing an investigation by the U.S. Securities and Exchange Commission (SEC). According to the DMM team's explanation, they received a subpoena from the SEC on December 15, 2020, concerning the sales of mToken and DMG coin, as well as other aspects of the company's business operations.

Despite the project's announcement of closure, the legal dispute between DMM and the SEC seems to be ongoing. Currently, the DMM team states that they are developing a plan to return DMG assets to the holders. However, the specific return framework and timeline have not yet been disclosed.

This event has once again sparked discussions in the industry regarding the regulatory issues of Crypto Assets projects. As regulatory agencies tighten their scrutiny of the digital asset space, projects like DMM may face more challenges. For investors, this serves as a reminder to exercise extra caution and thoroughly assess potential risks when participating in emerging encryption projects.