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ARTICLE · 26 JUNE 2023

Is The Sun Setting On Perceived DAO "Immunity"?: Ooki DAO Is A Person Under The Commodity Exchange Act

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On June 8, 2023, US District Judge William H. Orrick, in a default judgment, ordered Ooki DAO ("Ooki") to pay a civil monetary penalty of $643,542 for operating an illegal trading platform...

CanadaFinance and Banking
Ben Bathgate
Ben Bathgate
Madeline Klimek (Student-at-Law)
Madeline Klimek (Student-at-Law)
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On June 8, 2023, US District Judge William H. Orrick, in a default judgment, ordered Ooki DAO ("Ooki") to pay a civil monetary penalty of $643,542 for operating an illegal trading platform and unlawfully acting as a futures commission merchant. In addition, Ooki was banned from trading and was required – along with any third party providing web-hosting or domain-name registration services – to shut down its website and remove its content from the Internet.

The most significant legal implication of this decision is Judge Orrick's finding that Ooki was, in fact, a person under the Commodity Exchange Act and was therefore liable for any violations of that law.1 The question that arises is to what extent this was an unavoidable consequence of the more ostentatious conduct of Ooki's founders, or a sign of what is to come for DAOs more generally.

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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