- The firm aimed to generate more than $1 billion for general corporate purposes, mainly to buy Solana tokens.
- Solana was the preference of the firm because of its robust position in the crypto industry.
The Securities and Exchange Commission of the US has barred DeFi Development Corp’s $1 billion registration filing. The firm wanted to use the capital to invest in the Solana blockchain.
The regulatory body found that the filing was not eligible because a necessary internal controls report in the Form 10-K was missing. This led to the withdrawal of the filing by the firm, and it proceeded to refile in the coming days.
The decision of the SEC to obstruct the filing emerged from a compliance issue with DeFi Development’s documentation. The company hadn’t included the required internal controls report in its Form S-3 registration.
The mentioned report is very necessary for any company that wishes to file for capital raises and perform securities offerings. DeFi Development Corp first functioned under the name Janover, and it filed for the offering in April this year.
Company To Refile The Filing
The firm aimed to generate more than $1 billion for general corporate purposes, mainly to buy Solana tokens. As per the filing, a portion of the funds was set aside for investing in Solana.
Regardless of the withdrawal of the form, the firm mentioned that it wants to refile in the future after solving the concerns raised this time. The company further highlighted that no securities were issued at the time of this process.
Solana was the preference of the firm because of its robust position in the crypto industry. The filing highlighted that the investment would permit the firm to buy more Solana tokens, such as the Strategy Bitcoin plan, and profit from potential staking rewards.
Staking rewards in Solana can offer a return on investment, but only if the value of Solana rises after the tokens are bought. The firm mentioned in its filing that the funds accumulated will go toward acquiring Solana, with the assumption of making a return from staking activities.
However, currently, the future of this investment plan is uncertain because of the SEC’s actions.
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Source: https://thenewscrypto.com/sec-halts-defi-developments-1b-solana-focused-fundraising/