Ooki DAO to pay $643K fine after CFTC’s court victory
The trading platform will also be forced to shut down its website and operations.
The Commodity Futures Trading Commission (CFTC) said June 9 that it achieved a legal victory against Ooki DAO in a precedent-setting case.
Ian McGinley, the CFTC’s Division of Enforcement Director, said:
“The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability.”
Ooki DAO to shut down, pay $643K
The CFTC said that Ooki DAO would pay a civil penalty of $643,542. The DAO was also ordered to comply with permanent trading and registration bans.
Ooki Dao and third party-hosts will also be forced to shut down websites and remove online content.
The DAO was charged with illegally operating a trading platform and unlawfully acting as a futures commission merchant. It was intended as a successor to the bZeroX, a similar leverage and margin trading platform from the same co-founders.
Ooki DAO is a “person”
The CFTC also noted that courts determined that Ooki DAO is legally a “person” under the Commodity Exchange Act and held it liable as such.
The question of responsibility was previously an issue. The CFTC first served charges to Ooki DAO members via the project’s forum in September 2022, leading members to raise funds for their defense. However, a judge decided in December 2022 that only Ooki DAO’s original founders should be indicted as their identities were known.
DAOs, or decentralized autonomous organizations, are groups that use cryptocurrency-based voting to make decisions. Decisions are often hard-coded to execute on a blockchain once a vote is successful in a manner that is resistant to outside influence.
McGinley implicitly countered that idea by warning other DAO organizers that this structure does not allow groups to “insulate” themselves from the law.