The U.S. Commodity Futures Trading Commission (CFTC) has rattled the crypto community with an enforcement action it brought against Ooki DAO, leaving market participants fuming and unsure of which protocol could be targeted next by regulators.

In the September 22 press release, the CFTC revealed that it had issued an order to both file and settle charges against tokenized margin trading platform bZerox LLC (bZx) and its founders Tom Bean (Bean) and Kyle Kistner (Kistner).

The charges include illegally offering leveraged and margined retail commodity transactions in digital assets; engaging in activities only registered futures commission merchants (FCMs) can perform; and failing to adopt a customer identification program as part of a Bank Secrecy Act compliance program since 2019.

The CFTC also opened a federal civil enforcement action in the U.S. District Court for the Northern District of California charging the Ooki DAO - the DAO that took over management of bZx from the founders in August 2021 - with the same crimes. According to the CFTC, bZx will pay a $250,000 penalty.

“Margined, leveraged, or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges in accordance with all applicable laws and regulations. These requirements apply equally to entities with more traditional business structures as well as to DAOs,” Gretchen Lowe, the CFTC’s acting director of enforcement, said in a statement.

However, the action has been met with pushback from the crypto community and even a Commissioner of the CFTC. CFTC Commissioner Summer K. Mersinger published a dissenting statement remarking that the commission does not have the legal authority to enforce liability