BarnBridge DAO, which runs a small DeFi protocol, and its founders will pay more than $1.7 million to settle charges brought by the Securities and Exchange Commission for failing to register the offer and sale of cryptocurrencies.

The SEC said BarnBridge and its founders, Tyler Ward, 34, and Troy Murray, 38, did not register the "offer and sale of structured crypto asset securities known as SMART Yield bonds." The DAO compared those bonds to asset-backed securities and marketed them to the public, the SEC said in a statement on Friday. BarnBridge did not admit or deny the agency's findings. 

SMART Yield pooled together cryptocurrencies deposited by investors and then used those assets to generate returns to pay investors, the SEC said. 

"Ward and Murray used social media to …