Ooki DAO Ordered To Cease Operations as Court Issue Default Judgement

• The CFTC issued a statement on June 9 summarizing the extent of the default judgment.
• Ooki DAO has been issued permanent trading and registration bans.

A district court in the United States has issued a default judgment ordering Ooki DAO to cease operations. Furthermore asked to pay a $643,542 civil penalty. In September 2022, the CFTC sued Ooki DAO for “unlawfully acting” as a futures commission merchant. And providing consumers margin and leverage trading services.

Ooki DAO had until January 2023 to file an answer to the action, thus a default judgment has been looming for some time. The CFTC issued a statement on June 9 summarizing the entire extent of the default judgment and calling the ruling a “sweeping victory” in the litigation, which became final on June 9.

Moreover, Ooki DAO has been issued “permanent trading and registration bans,” and its website and all associated data must be removed from the Internet.

As reported by the commission:

“Critically, in a precedent-setting decision, the court held that the Ooki DAO is a ‘person’ under the Commodity Exchange Act and thus can be held liable for violations of the law. The court then held that the Ooki DAO did, in fact, violate the law as charged.”

Operating Without Legal Accountability

One of the first occasions a government body has gone after a DAO and its token holders was in this case involving Ooki DAO. Industry participants had previously assumed that the decentralized character of DAOs and decentralized financial platforms shielded them from regulatory oversight.

However, the CFTC claimed that Ooki DAO’s forerunner bZeroX’s creators Tom Bean and Kyle Kistner tried to transfer control of the non-compliant trading platform to Ooki DAO in order to escape legal repercussions.

CFTC Division of enforcement director Ian McGinley stated:

“The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability.”

The recent crackdown by U.S. SEC has hit the crypto sector hard and now all eyes are on the upcoming Fed interest rate hike.