Paradigm Seeks CFTC to Serve Ooki DAO's Members
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On Monday, Paradigm submitted a motion seeking permission to join the Ooki DAO case, claiming that the CFTC's position that every voting token holder engaged in the DAO's governance process is responsible and could pose a danger to DAOs generally.
CFTC Filed Lawsuit Against Ooki DAO
Last month, the CFTC filed a lawsuit against Ooki DAO in the US District Court for the Northern District of California, claiming that the DAO had provided access to unlicensed leveraged and margin cryptocurrency trading products to Americans in violation of federal commodities regulations. The DAO has now geofenced users with U.S.-based IP addresses, but as of publication, it has not reacted in court to the CFTC.
The crypto community has voiced alarm over the CFTC's investigation of the DAO, even if it hasn't attempted to refute the claims that the DAO and its predecessor business, bZeroX, sold unregistered items to Americans. Lawyers are particularly worried that the CFTC has created a broad picture by making each owner of a voting token individually accountable and attempting to serve the whole DAO by putting the complaint on a forum and online portal.
Different Choices of People
According to Paradigm's filing on Monday, the community of individuals making choices on the DAO is fluid, ever-changing, and distinct for each proposal on which they vote.
The submission in the proposed amicus brief noted that the Commission's action appears intended to generate a default judgment. By acknowledging that it has not identified any specific token holders in the "Ooki DAO" while threatening to hold token holders jointly and individually accountable, the Commission has created a significant disincentive for anybody to appear and defend this case. And in fact, no defendant has yet arrived.