• The US Commodity Futures Trading Commission (CFTC) won a precedent-setting case against Ooki DAO.
• Judge William H. Orrick ruled that Ooki DAO is “a person” and can be held liable when violating the law.
• The CFTC has also subpoenaed another DAO, Sushi DAO, for possible violations of securities laws.
Case Against Ooki DAO
A US district judge ruled in favor of the US Commodity Futures Trading Commission (CFTC) in its litigation against Ooki DAO — which could have further implications for other decentralized autonomous organizations. Judge William H. Orrick entered a default judgment order on Thursday night, which requires Ooki DAO to pay a civil penalty of $643,542, stop operating in the US and ordering it to shut down Ooki DAO’s website.
The agency charged Ooki DAO in late 2022 with operating an illegal trading platform, registration violations and for failing to comply with the Bank Secrecy Act, such as know-your-customer requirements. The CFTC called it a “precedent-setting decision” since the court held that Ooki DAO is “a person” and can be held liable when violating the law.
Implications For Other Decentralized Autonomous Organizations
The ruling had far reaching implications for other decentralized autonomous organizations as it established that they can be held accountable under US laws if found guilty of any wrongdoings or violations of securities laws. This sent shockwaves through the industry as many were expecting that such organizations would not be subject to such regulations due to their decentralized nature.
SEC Subpoenas SushiDAO
In March of this year, another DAO called SushiDAO — an organization behind a decentralized crypto exchange — said that it was subpoenaed by the US Securities and Exchange Commission (SEC). This move comes after CFTC’s action against OkkiDAo last year and suggests that SEC is taking steps to ensure compliance from all similar organizations within its jurisdiction.
„Wake Up Call“ From CFTC
The CFTC warned other similar organizations saying: “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,“ said Ian McGinley, director of its enforcement division in an official statement on Friday morning .
To conclude , this case establishes clear precedence with regards to how decentralized autonomous organizations will be treated under U.S laws if found guilty or malpractice or violation of securities laws . It also sends out a warning signal from both SEC and CFTC towards similar entities operating within their jurisdiction .