Court Allows CFTC To Serve Ooki DAO Members Through Help Bot

A Northern District of California court has agreed to allow the Commodity Futures Trading Commission (CFTC) to serve Ooki DAO members through internet forums.

A federal court determined Monday that the Commodity Futures Trading Commission can service a decentralized autonomous organization (DAO) through a website support bot and forum post.

According to the District Court for the Northern District of California, the CFTC properly served Ooki DAO, which it contends facilitates unlawful leveraged and margined transactions without a Futures Commission Merchant designation or know-your-customer program, on September 22, 2022.

The DAO has three weeks from that date to react, which means that if no one answers by Oct 13, the CFTC may win a default judgment.

The decision came on the same day that a group of crypto attorneys and developers filed a motion to join the CFTC’s action against Ooki DAO, saying that the regulator’s efforts to hold the DAO’s participants individually accountable are depriving them of the right to reply.

According to a filing published Monday, LeXpunK, a collective organization of attorneys and engineers involved in the crypto industry, has sought a federal judge for permission to join the Ooki DAO lawsuit as a friend of the court or amicus curiae.

“Because the Commission provided the documents in this manner on September 22, 2022, the Court holds that the Commission effectively served the Ooki DAO on that date,” says the order.

The CFTC sued Ooki DAO last month. The action was brought in conjunction with a settlement agreement with the creators of the bZx protocol for alleged failure to register with the regulator.

The protocol transferred control to Ooki DAO in 2021 as part of a decentralization drive, according to the CFTC, which also holds the DAO and its governance token holders liable for failing to register.

Members of the Ooki DAO have been debating how to respond to the CFTC case, including the idea of assigning treasury cash to DAO members’ legal counsel or raising more funds to undertake their own legal battle.

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