The United States Securities and Exchange Commission (SEC) announced Wednesday that it has reached an agreement to settle previously unannounced charges against Rari Capital, a decentralized finance (DeFi) platform.

The regulator alleged that Rari Capital and co-founders Jai Bhavnani, Jack Lipstone, and David Lucid misled investors and that the platform served as an unregistered broker. Rari Capital's platforms held more than $1 billion worth of assets at one point, the SEC said.

“We allege that Rari Capital and its co-founders misled investors about both the features and profitability of certain of the crypto asset investments Rari Capital offered, and acted as unregistered brokers,” said Monique C. Winkler, Director of the SEC’s San Francisco Regional Office, in a release.

“We will not be deterred by someone labeling a product as 'decentralized' and 'autonomous,'" she continued, "but instead will look beyond the labels to the economic realities, as we did here, and hold the individuals behind crypto products and platforms accountable when they harm investors and violate the federal securities laws.”

Rari Capital and the founders did not admit or deny the SEC's allegations, but agreed to various penalties including "permanent injunctions, conduct-based injunctions, civil penalties, disgorgement with prejudgment interest, and equitable officer-and-director bars against the co-founders for a period of five years." Furthermore, Rari Capital Infrastructure agreed to a cease-and-desist order as part of the settlement.

Editor's note: This story is breaking and will be updated with additional detail.