Ooki DAO May Not Establish Defense Against CFTC

Ooki DAO, the first decentralized autonomous organization (DAO) to be brought to court for allegedly breaking the law in the US, is struggling to rally a response with the Commodity Futures Trading Commission (CFTC) only. There are still a few days left for the DAO to respond to a court filing on what could be a major test for crypto governance.

At the end of September, the CFTC filed a complaint against Ooki token holders who participated in the administration of the Ooki Protocol by using their tokens to vote in the DAO. Additionally, the decentralized management of Ooki – the owner of its DAO token – is responsible for the platform’s alleged misconduct.

On Monday, a proposal to create a legal hedge fund and block US users from Ooki failed with no votes in favor or against. This process is meant to bring a formal response to the CFTC, the DAO is running out of time: the court’s deadline is Friday.

If it passes the proposal pledges to use Ooki DAO’s treasury for legal fees of “any DAO members named in a complaint,” pursue a crowdfunded legal defense fund to protect other DAOs that catch regulators’ ire and allocate the treasury toward the continued operation of the DAO.

According to attorney Nelson Rosario, who runs a crypto law practice, token holders may fear that by simply voting on Ooki DAO’s response to legal threats, they could get wrapped up in them.

Data website Nansen indicates that Ooki DAO has over $3 million in cash on hand, much of it in native tokens.

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