CFTC Urges Court To Enter A Default Judgment Against Ooki DAO Lawsuit

Key Points:

• Ooki DAO ignored a lawsuit, so the CFTC is asking a federal judge to determine that it broke federal commodities regulations.
• The DAO was sued by the agency on allegations that it operated an unlicensed cryptocurrency futures trading platform and neglected to carry out adequate know-your-customer checks.
• On December 20, 2022, the Court deemed service on the Ooki DAO of the Complaint and Summons in this action complete as of that date.

In response to the decentralized autonomous organization’s (DAO) failure to reply to ongoing litigation, the U.S. Commodity Futures Trading Commission (CFTC) is asking a federal judge to determine that Ooki DAO breached federal commodities regulations.

In a filing on Wednesday, the CFTC claimed that the DAO’s deadline to respond (January 10, 2023) had passed and that the court should grant the group a default judgment.

“Pursuant to Rule 12(a)(1)(A)(i), the Ooki DAO’s answer or other responsive pleading to the Complaint was due on or before January 10, 2023. The Ooki DAO failed to answer or otherwise defend as instructed by the Summons and as provided by the Rules.”

Ooki DAO was sued by the CFTC on allegations that it operated an unlicensed cryptocurrency futures trading platform and neglected to carry out adequate know-your-customer checks.

Ooki DAO, the business that took over from bZeroX, allegedly permitted individuals from the United States to trade illegal crypto derivatives products. In September of last year, the CFTC reached a settlement with bZeroX and the company’s founders, Tom Bean and Kyle Kistner, and simultaneously made an attempt to sue the entire DAO. A forum message and a chatbot were used to serve the lawsuit.

The CFTC should be required to identify the token holders behind Ooki DAO rather than acting on behalf of the DAO as a whole, according to a number of legal organizations and crypto sector businesses that objected to treating a DAO like a person.

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