The Commodity Futures Trading Commission (CFTC) uses unconventional methods regarding DAO-focused altcoin projects. The US regulator sued members of a DAO for the first time last week.
CTFC lawsuit will decide the fate of this altcoin project
The Ooki DAO, a community-run project, faces strict scrutiny from the US regulator CFTC. According to court documents filed Tuesday, the Commodity Futures Trading Commission (CFTC) used unorthodox methods to bring lawsuits against anonymous members of the DAO. The CFTC attorney, who filed the case in an online meeting, is targeting the organization’s tokenization methods. Ooki members operate a protocol that offers off-exchange tokenized leverage and lending services.
On September 22, the CFTC attorney sued the Ooki DAO and its members for non-compliance with AML protocols, in an online debate. The lawsuit, announced last week, was the first to be filed by the CFTC against members of a DAO. As such, it will lay a broad foundation for future DAO fixes. Also, charges were filed and settled against two of its founders, who ordered a $250,000 fine against bZeroX, of which Ooki DAO is on the management team.
Now members of the Ooki DAO face their own lawsuits
The CFTC is seeking liquidation, trading and registration bans, injunctive relief and fines for further violations of the Commodity Exchange Act (CEA). However, the CFTC’s inability to find a member of the DAO to serve the cause suggests that reaching a decision would be more complex than in the case of bZeroX’s founders. A DAO member has approximately 21 days to respond to the case to avoid a default judgment on behalf of the CFTC.
The CFTC’s alternate service request requests a court in the Northern District of California to authorize its unorthodox methods of filing complaints and appeals to the Ooki DAO. The motion argues that although no one from the DAO has responded to the CFTC’s requests for contact, Ooki argues that the litigation discussions in the DAO Telegram chat and “the CFTC’s post on the Action Online Forum has been viewed at least 112 times.”
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