The CFTC fined Ooki DAO

The CFTC, which stands for Commodity Futures Trading Commission, fined Ooki DAO and its members for being considered an “unincorporated association”.

The fine would amount to $ 250,000.

CFTC fine against Ooki DAO: more details on the incident

It is worth mentioning that unfortunately DAOs can also be sued, the proof of which is the following document.

This time it’s under control Ooki DAO and token holders of the Decentralized Autonomous Organization.

It seems that the members of Ooki DAO have been sued for being part of an association without legal personality!

In this case, the responsibility of an AU falls on all subjects who are part of the same association.

This means that if the CFTC can prove that an individual is part of Ooki DAO, the same individual can be accused of violating federal law.

It also appears from the various documents that the CFTC is trying to understand which characteristics qualify a user as a member of the same DAO. Immediately highlight that participation in DAO voting is certainly a relevant element.

That said, users who want to avoid any kind of engagement are expected to opt for the more obvious alternative; the one of burn or transfer their own tokens.

DAO regulated

Many scholars, legal experts and cryptocurrency Experts believe that the safest way to go if you want to create a DAO is to be regulated.

The best option would seem to be that of a: “DAO Legal Wrapper”, which allows, in a nutshell, to:

  • Hold the DAO treasure
  • Protect DAO members from unlimited liability
  • Allow DAO members to vote

An extremely useful solution that allows the DAO to have a structure to manage the protocol on behalf of the members who, at the same time, would not risk being personally responsible and punishable.

So what the DAO could do is vote to structure itself as an unincorporated Non-Profit, or Wrapper.

This would allow the creation of a separate legal entity which would deal with the governance of the DAO, “modifying, operating and commercializing” the Protocol to which the DAO itself is associated.

Thus, in the event of a dispute with the CFTC, the legal entity will be legally liable and not the members of the DAO.


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