CFTC Declares Victory in Precedent-Setting Case Against Ookie DAO
Image courtesy of 123rf.

CFTC Declares Victory in Precedent-Setting Case Against Ookie DAO

CFTC recently won its case against Ookie with the court ruling that DAOs can be considered “persons” for legal matters.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

On June 9th, the Commodity Futures Trading Commission announced it had won its lawsuit against Ookie DAO. The result of the litigation sets a new precedent as it confirms that a decentralized autonomous organization can be considered a “person” and targeted with a lawsuit.

Court Rules That DAOs Can Be Considered “Persons” For Legal Purposes

This Friday, the Commodity Futures Trading Commission published its statement on a victory against Ookie DAO. The ruling is of particular import as the court confirmed that a decentralized autonomous organization can be considered a “person” for the purposes of litigation.

The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability. This decision should serve as a wake-up call to anyone who believes they can circumvent the law by adopting a DAO structure, intending to insulate themselves from law enforcement and ultimately putting the public at risk.

CFTC Division of Enforcement Director Ian McGinley

According to the CFTC, the decentralized autonomous organization operated as an illegal trading platform and futures commission merchant. Ookie DAO is to pay a penalty of $643,542. Its website is also to be shit down, a ban on trading and registrations is to be placed.

Join our Telegram group and never miss a breaking digital asset story.

US Regulators Increase Pressure on Crypto Industry

The CFTC victory against Ookie DAO is the latest in a series of regulatory actions targeting various elements of the cryptocurrency industry. While the community has mostly been focused on the Securities and Exchange Commission due to its aggressive approach. the CFTC has been seeking greater authority over the space for a long time.

Despite this, the SEC has undoubtedly been significantly more active. This week alone, it filed lawsuits against two of the biggest companies in the industry. It sued Binance on Monday and unveiled its action against Coinbase on Tuesday.

At the same time, Congress has been slowly working on new rules intended to, among other issues, resolve the problem of which watchdog has jurisdiction over which elements of the digital assets industry. Late last week, lawmakers released a draft bill and are currently seeking “constructive feedback”.

Finance is changing.
Learn how, with Five Minute Finance.
A weekly newsletter that covers the big trends in FinTech and Decentralized Finance.

Do you think more lawsuits targeting DAOs will appear following today’s precedent? Let us know in the comments below.