On September 19, the U.S. Securities and Exchange Commission (SEC) announced charges against Rari Capital, Inc., the entity behind the DeFi protocol, and its co-founders Jai Bhavnani, Jack Lipstone, and David Lucid. The SEC alleges that they misled investors and engaged in unregistered broker activities while operating two blockchain-based investment platforms, which collectively held over $1 billion worth of crypto assets at their peak.

As part of the settlement agreement, Rari’s co-founders have agreed to pay penalties and be barred from serving as officers and directors for five years, subject to court approval.