SEC Settles with DeFi Protocol Rari Capital for Misleading Investors

Foresight News reports that the US Securities and Exchange Commission (SEC) has reached a settlement agreement with DeFi protocol Rari Capital and its founders Jai Bhavnani, Jack Lipstone, and David Lucid for allegedly misleading investors and acting as unregistered brokers.

The SEC alleges that Rari Capital offered two investment products, Earn Pools and Fuse Pools, which functioned like crypto asset investment funds. By selling interests in these pools and RGT, Rari Capital conducted unregistered offers and sales of securities.

Rari Capital and the three co-founders agreed to a final judgment, without admitting or denying the allegations, including permanent injunctions, conduct-based injunctions, civil penalties, disgorgement, and prejudgment interest. The co-founders are also barred from serving as officers and directors for five years.

In a separate order, Rari Capital Infrastructure LLC, which took over operations from Rari Capital in 2022, also settled with the SEC regarding allegations that it engaged in unregistered securities offerings and acted as an unregistered broker.