CFTC wins legal battle against Ooki DAO

A federal judge has ruled in favor of the U.S. Commodity Futures Trading Commission (CFTC) in its landmark case against Ooki DAO. Announcing its “sweeping victory” on June 9, the CFTC revealed that the decentralized autonomous organization would pay a civil monetary penalty of $643k.

Last September, the Commission filed a lawsuit against the DAO in the U.S. District Court for the Northern District of California, alleging that the group offered illegal leverage and margin trading services. The implication was that voting members of the DAO could be liable to face sanctions for violating the provisions of the Commodities Exchange Act (CEA). However, in December a judge ruled that only the DAO’s original founders should be indicted as their identities were known.

According to Ian McGinley, the CFTC’s Division of Enforcement Director, “the founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability.” He goes on to caution others who may be looking at DAOs as a way to circumvent the law.

This decision should serve as a wake-up call to anyone who believes they can circumvent the law by adopting a DAO structure, intending to insulate themselves from law enforcement and ultimately putting the public at risk.

As part of the ruling, Ooki DAO has been ordered to stop registration and trading activities, as well as immediately shut down its website and remove its content from the internet.

The judgment implies that DAOs may soon become the target of regulatory bodies, with one victory already in the bag.

Speaking of regulation, remember that Sushi DAO and its Head Chef, Jared Grey, received a subpoena from authorities earlier this year.