The CFTC has found a creative way to deliver lawsuit documents to Ooki DAO.
The Commodity Futures Trading Commission (CFTC), an independent US government agency regulating US derivative markets, has chosen a unique way to hand lawsuit documents to Ooki decentralized autonomous organization (DAO) members.
According to the court documents issued by the District Court in the Northern District of California San Francisco Division, CFTC posted the complaint and other court-related documents on an online forum designed for DAO members to discuss various governmental issues. Moreover, CFTC sent the documents through a help chat box on DAO’s website.
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Alongside submitting court documents, CFTC is asking the court to allow using chatbots and forum posts as a proper way to deliver lawsuit documents to the defendants.
The Commodity Futures Trading Commission filed a lawsuit last week accusing Ooki DAO and bZeroX, LLC “for illegally offering leveraged and margined retail commodity transactions in digital assets; engaging in activities only registered futures commission merchants (FCM) can perform; and failing to adopt a customer identification program as part of a Bank Secrecy Act compliance program, as required of FCMs.” It is the first CFTC case against a decentralized autonomous organization.
CFTC ordered bZeroX, the decentralized lending platform’s bZx protocol creators, to pay a penalty of $250,000. On the other hand, CFTC aims to ban Ooki DAO from trading their services, make DAO responsible for violating the Commodities Exchange Act (CEA) and issue monetary penalties.
Following the accusations, Ooki DAO used its forum to discuss various options on how to respond to the lawsuit with its community members. The DAO community identified three alternatives.
The first option notes that DAO should allocate funds from its treasury and hire lawyers for sued DAO members. The second option suggests collecting financial support from the decentralized finance (DeFi) community for its legal battle. The last alternative offers collecting funds by selling non-fungible tokens (NFTs).
It is likely that DAO may likely host a governance vote to draw final conclusions. The lawsuit hearing is scheduled for November 9th.
by Gile K. – Crypto Analyst, BitDegree
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