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ARTICLE · 23 NOVEMBER 2022

CFTC Ooki DAO Enforcement Action Update: The Commission Responds

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A DAO is a decentralized autonomous organization where token holders, here the Ooki "governance" token holders, have the ability to vote on governance decisions of the DAO.

United StatesFinance and Banking
Elanit Snow
Elanit Snow
John Warnke
John Warnke
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On September 22, 2022, the CFTC announced an order simultaneously filing and settling charges against bZeroX, LLC ("bZeroX") and its creators for illegally offering leveraged and margined retail commodity transactions in digital assets, operating as an unregistered futures commission merchant and failing to conduct KYC on its customers. According to the CFTC, a month prior to this settlement announcement, bZeroX transferred control of the bZx Protocol to the bZx DAO, a decentralized autonomous organization ("DAO"), which later renamed itself as the Ooki DAO. On the same day as the bZeroX settlement was announced, the CFTC filed an enforcement action against the Ooki DAO (successor to bZeroX) for violating those same regulations. The CFTC stated that bZeroX and its creators engaged in this unlawful activity in connection with their decentralized blockchain-based software protocol that functioned in a manner similar to a trading platform. The transactions executed on

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