Ooki DAO is mulling its options to fight back against the CFTC

Quick Take

  • Ooki DAO members have identified three possible action items in response to the CFTC lawsuit.
  • The DAO could hold a vote in the coming weeks to decide how it will handle its defense.

The Ooki DAO has begun discussing within the community about how to respond to the recent lawsuit filed against the DAO by the US Commodity Futures Trading Commission (CFTC).

The CFTC’s lawsuit claims that Ooki DAO is an unincorporated association involved in unlawful activity, namely running an unlicensed exchange called bZx. The founders of the exchange recently settled with the regulator to the tune of $250,000. As part of the complaint against Ooki DAO, the CFTC says community members who participated in governance votes are liable for Ooki’s alleged wrongdoings.

DAO members are now discussing the appropriate response to the CFTC’s lawsuit. One of these responses involves allocating treasury funds towards legal counsel for DAO members.

The Ooki community is also mulling the idea of raising additional funds for a possible legal challenge of the CFTC’s complaint. One possible route proposed by the DAO member who initiated these discussions is to submit a grant proposal on Gitcoin to raise funds for the legal defense. The idea here is to elicit support from the broader DeFi and crypto community to support the Ooki DAO's legal fight. “Insofar as all DAOs have a stake in the outcome, broad community support of Ooki DAO’s legal defense is critical,” the forum post stated.

NFTs have also been identified as another possible fundraising route for the DAOs legal defense. The community is discussing the possibility of releasing an NFT collection to raise funds for the endeavor.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

These discussions could lead to a possible vote on the matter. Early reactions within the community have so far been supportive of the motions raised in the forum post.

The CFTC’s lawsuit against Ooki DAO did elicit strong reactions from a cross-section of the crypto space. Many lawyers and commentators expressed concerns about the CFTC’s approach and the possible negative implications for DAOs and decentralized governance in general.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


About Author

Osato is a news reporter at The Block as part of the crypto ecosystems team that focuses on DAO governance, staking, blockchain layers, and DeFi. He was previously a news reporter at Cointelegraph. Based in Lagos, Nigeria, he enjoys crosswords, poker, and attempting to beat his Scrabble high score. Follow him on Twitter at @OsatoNomayo.