• CFTC secures a victory in the Ooki DAO litigation.

  • The court imposed a $643k penalty and ordered the closure of the illegal platform.

  • CFTC says the ruling is a wake-up call to those seeking to evade legal accountability.

In a groundbreaking ruling, the Commodity Futures Trading Commission (CFTC) has emerged triumphant in the Ooki DAO litigation. The U.S. District Judge William Orrick issued a default judgment order on Friday, dealing a heavy blow to the decentralized autonomous organization (DAO). 

The court has mandated Ooki DAO to pay a substantial civil monetary penalty of $643,542, imposed permanent trading and registration bans, and commanded the shutdown of Ooki DAO’s website while eradicating its online presence.

Today the CFTC’s Division of Enforcement Director Ian McGinley released a statement on the Ooki DAO litigation victory. Learn more: https://t.co/MInNeKLeH5

— CFTC (@CFTC) June 9, 2023

The CFTC had charged Ooki DAO with operating an illegal trading platform and engaging in activities that violated the Commodity Exchange Act by unlawfully acting as a futures commission merchant (FCM). 

The court’s precedent-setting decision crucially determined that Ooki DAO qualifies as a “person” under the law, effectively establishing the organization’s liability for its transgressions.

The CFTC Division of Enforcement Director Ian McGinley did not mince words when commenting on the verdict. He expressed his belief that Ooki DAO’s founders intentionally designed the organization to evade legal accountability and run an illicit trading platform. McGinley said: 

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.

This legal battle was initiated by the CFTC in 2022, simultaneously filing a federal civil enforcement action and issuing an administrative order against Ooki DAO’s predecessor LLC, bZeroX, and its founders. 

The administrative order and enforcement action accused bZeroX (and subsequently Ooki DAO) of unlawfully offering leveraged and margined retail commodity transactions outside of a registered exchange. 

The post Ooki DAO Hit with $643,542 Civil Penalty as Court Orders Shutdown appeared first on Coin Edition.