Default Judgment against Ooki DAO: CFTC Calls for It

• Ooki DAO had been charged with violating federal commodities law. 
• Sued by CFTC last year on two accounts, DAO failed to respond on January 10, 2023. 
• The case has been running since last year.

There is a continuous battle between authorities and the crypto industry for various reasons, the latest being that of Ooki DAO. A federal judge has been asked by the United States’ Commodity Futures Trading Commission (CFTC) to rule that this DAO failed to adhere to and violated federal commodities law as they did not respond to ongoing lawsuits. 

Ooki DAO was sued last year by the CFTC on the charges of running an unregistered crypto futures trading facility and failing to carry out proper KYC. Regarding the ongoing case, the DAO was to respond on January 10, 2023; failing to do so had made CFTC argue that the court should enter a default judgment against the group. 

The filing further says that 

“On December 20, 2022, the Court deemed service on the Ooki DAO of the Complaint and Summons in this action complete as of the date. 

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.”

They had failed to answer or defend their grounds in court, which would garner Summons. 

Ooki DAI is a successor of bZerox, and it allegedly allowed US residents to trade in illegitimate crypto derivatives products. CFTC had already settled the charge with predecessor bZerox and its founder, Kyle Kistner and Tom Bean, in September 2022; the authority also tried to sue the entire DAO simultaneously. 

But various attorney groups argue argues against saying DAO cannot be treated as a person and that CFTC would have to identify the token holders. 

Judge Willian Orrick of the US District Court for the Northern District of California initially wanted CFTC to serve at least one token holder, as per December 20, 2023 ruling. At the time, its founders were available that clarifiesclear the situation. Although previous CFTC settlements and their attorney statement argued they both had no role in DAO. 

Judge Orrick further wrote that,

“In this case, requesting the CFTC to serve some individual known Token Holders even after the DAO received actual notice is a belt-and-suspenders procedure to ensure that the due process requirements are met.” 

All the information regarding the case that was available with CFTC has been utilized well, clarifying that Ooki DAO has actual notice. While their services were proper should be compiled with due process requirements.”

The judge then pointed out the “national media coverage” and that four friend-of-the-court briefs were considered evidence. And all this while Ooki DAO is aware of the lawsuit against them. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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