A federal judge has sided with the U.S. Commodity Futures Trading Commission (CFTC) in a lawsuit against decentralized autonomous organization (DAO) Ooki DAO, granting the CFTC a default judgment. The lawsuit alleged that Ooki DAO offered unregistered commodities, and the judge ordered the organization to pay $643,542 in penalty, to permanently cease its operations and shut down its website. Judge William H. Orrick ruled that Ooki DAO operated an illegal trading platform and unlawfully acted as an unregistered futures commission merchant (FCM).
The CFTC’s lawsuit also claimed that Ooki DAO neglected to observe know-your-customer laws while serving retail customers. After the suit was filed, Ooki DAO geofenced the U.S. to avoid legal scrutiny. This ruling could be a sign that DeFi actors are no longer immune to regulatory oversight. In March, a California court ruled bZx protocol and its token-holding community members were liable for losses resulting from an exploit, and in April, the Securities and Exchange Commission (SEC) subpoenaed SushiSwap Head Chef Jared Grey.