Ooki DAO ignores court request
2023.01.12 04:45
Ooki DAO ignores court request
By Kristina Sobol
Budrigannews.com – After Ooki DAO missed the deadline to respond to the lawsuit, the Commodity Futures Trading Commission (CFTC) has begun the process of obtaining a default judgment in its case against the DAO.
The regulator stated in a court filing from January 11 that it had missed the deadline to “answer or otherwise defend” as instructed by the summons and requested an “entry of default” against the DAO.
Ooki DAO will no longer be able to answer or respond to the suit if the entry of default is approved. This will show that Ooki DAO did not plead or defend itself in court.
The first step in obtaining a default judgment—a decision made by the court when the defendant fails to defend a lawsuit—is an “entry of default.”
The CFTC filed the relevant lawsuit on Sept. 22, alleging that Ooki DAO illegally offered retail traders “leveraged and margined” digital asset commodity transactions, failed to implement a method of customer identification, and “engaged in activities only registered futures commission merchants (FCM) can perform.”
The notice on the DAO’s online forum and the lawsuit were both delivered to the DAO via its help chat box.
In December, District Judge William Orrick directed the CFTC to serve Tom Bean and Kyle Kistner, the founders of a trading platform that served as a predecessor to Ooki DAO. Orrick also stated that the CFTC “should serve at least one identifiable Token Holder if that is possible.”
Numerous individuals criticized the regulator for bringing the lawsuit forward without clear regulatory guidelines. Summer Mersinger, the commissioner of the CFTC, even referred to the action as a strategy of “regulation by enforcement.”
Due to the fact that charges and enforcement will be brought against an organizational structure that has no central body and frequently includes anonymous members, the case may serve as a fascinating precedent for subsequent lawsuits involving DAOs.
Judge Orrick stated in a court filing on December 20 that the Ooki DAO “has the capacity to be sued as an unincorporated association under state law,” but that this does not “necessarily establish” that the DAO is a group that is liable under commodities regulations.
He went on to say that those concerns can be addressed “later in litigation.”
