Australia's financial watchdog has placed Barnaje DAO on its investor alert list. The Australian Securities and Investments Commission (ASIC) added the entity on April 7th, 2025, citing concerns that Barnaje DAO is offering financial services to Australian consumers. The organization lacks the necessary Australian financial services or credit licenses.
Operating without authorization from ASIC constitutes securities fraud under Australian law. Barnaje DAO first appeared in late 2023 as a gifting scheme. It is reportedly led by Lynford Theobald, an 80-year-old Utah resident with a history of promoting similar pyramid schemes.
The initial version of Barnaje failed within months of its debut. Theobald then relaunched the operation as Barnaje DAO. This rebranding appears to be an attempt to obscure Theobald's control over the fraudulent gifting scheme.
ASIC maintains an Investor Alert List to warn the public about entities that may be engaging in unlicensed or fraudulent financial activities. Inclusion on this list signifies that ASIC has concerns about the entity's operations and potential risks to investors. Consumers are advised to exercise extreme caution and conduct thorough due diligence before engaging with any entity on the list.
The scheme's structure as a "gifting scheme" is a common tactic used by promoters of illegal pyramid operations. These schemes typically promise high returns on investments, but the money primarily comes from new participants paying into the scheme, rather than from legitimate business activities. When recruitment inevitably slows, the scheme collapses, leaving most participants with significant financial losses.
Theobald's prior involvement in similar schemes suggests a pattern of deceptive practices. Regulators like ASIC often track individuals with a history of promoting fraudulent ventures. The rebranding to "DAO" may be an attempt to appear more legitimate or to create distance from previous failed ventures. However, regulatory bodies are adept at looking beyond superficial changes to identify the underlying fraudulent nature of an operation.
Victims of fraudulent investment schemes are encouraged to report their experiences to ASIC. The commission investigates allegations of securities fraud and can take enforcement actions, including imposing penalties and seeking court orders to recover investor losses. Information about reporting scams and seeking assistance is available on the ASIC website.