Ooki DAO to be fined $643,000 after CFTC wins

The trading platform will also be forced to shut down its website and operations.

The US Commodity Futures Trading Commission (CFTC) said on June 9 that it had won a legal victory against Ooki DAO in a precedent-setting case.

Ian McGinley, director of the CFTC Division of Enforcement, said:

“The founders created Ooki DAO as an escape, with the express goal of operating an illegal trading platform without legal liability.”

Ooki DAO closes, paid $643k

Ooki DAO will pay a civil penalty of $643,542, and the DAO is also ordered to comply with a permanent trading and registration ban, the CFTC said.

Ooki Dao and third-party hosts will also be forced to shut down their sites and remove online content.

DAO was accused of illegally operating a trading platform and illegally acting as a futures commission merchant. It is intended as a successor to bZeroX, a similar leveraged and margin trading platform from the same co-founders.

Ooki DAO is a "person"

The CFTC also noted that under the Commodity Exchange Act, the court found that Ooki DAO was legally a "person" and therefore liable to it.

The question of liability used to be an issue. The CFTC first brought charges against Ooki DAO members through the project’s forum in September 2022, directing members to raise funds for their defense. However, a judge decided in December 2022 that only the original founders of Ooki DAO should be prosecuted because their identities are known.

DAOs or Decentralized Autonomous Organizations are groups that use cryptocurrency-based voting to make decisions. Once a vote is successful in a way that is immune to outside influence, the decision is usually hard-coded on the blockchain for execution.

McGinley implicitly pushed back on this idea by warning other DAO organizers that the structure would not allow groups to “isolate” themselves from the law.