Ooki DAO to shut down after 'precedent setting' court battle with CFTC
A U.S. District Judge has entered a default judgment order that requires Decentralized Organization Ooki DAO to permanently shut down and pay a civil monetary penalty of $643,542.
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
The Commodity Futures Trading Commission initially filed a lawsuit against Ooki DAO in September 2022, accusing the DAO of illegally offering retail margin and leverage trading services, and “unlawfully acting” as a futures commission merchant.
A default judgment had essentially been on the cards for months after Ooki DAO missed the deadline to respond to the lawsuit in January.
With the order now official as of June 9, the CFTC released a statement on the same day describing the lawsuit as a “sweeping victory” as it outlined the full scope of the default judgment.
Ooki DAO has received “permanent trading and registration bans” and moving forward it has been ordered to shut down the Ooki DAO website and “remove its content from the Internet.”
This case against Ooki DAO was unique as it marked one of the first times a government agency had gone after a DAO and its token holders.
Before this case, there was a belief held amongst the industry that DAOs and decentralized finance platforms were mostly protected from regulatory scrutiny due to their decentralized nature.
Related: SEC lawsuits against Binance and Coinbase unify the crypto industry
A key issue however, is that CFTC alleged that Tom Bean and Kyle Kistner, the founders of Ooki DAO’s predecessor bZeroX had intentionally attempted to hand over ownership of their non-compliant trading platform to the Ooki DAO to avoid any potential
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