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ARTICLE · 22 JUNE 2023

Ooki DAO Default Judgment: Regulators Still Face Many Technical And Legal Challenges In Regulating Smart Contracts

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Herbert Smith Freehills Kramer LLP

Herbert Smith Freehills Kramer LLP

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The Commodity Futures Trading Commission (CFTC) won what it described as a "sweeping victory" in its case against Ooki DAO, in which the CFTC alleged that the decentralized autonomous organization...

United StatesTechnology
Kristopher B. Kastens
Kristopher B. Kastens
Linda Butler
Linda Butler
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The Commodity Futures Trading Commission (CFTC) won what it described as a "sweeping victory" in its case against Ooki DAO, in which the CFTC alleged that the decentralized autonomous organization (DAO) operated an illegal trading platform. Nonetheless, the CFTC's victory represents only one aspect of the overall challenge, as the uncertainty of how and whether the CFTC will successfully enforce its judgment remains. This task is more complex than it appears, as the key attribute of Ooki DAO membership lies in owning a governance token associated with the DAO. Establishing a direct connection between these tokens and real individuals is challenging. The CFTC's attempts to collect on its judgment will be the real test of the theory that some DAOs are "enforcement proof" because of their decentralization. This case also leads to questions about the regulation of smart contracts1in the future and whether it is possible to effectively regulate smart contracts that

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