U.Today - As per a statement shared by the CFTC, the U.S. District Judge treated a decentralized autonomous organization (DAO) as a "person" in a recent ruling. This document is a crucial precedent for Web3 regulatory frameworks in the U.S.
CFTC celebrates victory in Ooki DAO case, six-digit penalty imposed
On June 9, 2023, the U.S. District Judge William H. Orrick ruled that Ooki DAO violated the law by operating an illegal trading platform and acting as a futures commission merchant.As such, the U.S. court in a precedent-setting decision sided with the CFTC, which sued Ooki DAO and its predecessor bZeroX for crimes against investors.
The defendants should also pay a civil monetary penalty of $643,542. All their websites should be shut down by hosting service providers. Permanent trading and registration bans are also imposed.
CFTC's Division of Enforcement Director Ian McGinley stressed that this solution is to be of paramount importance for the future of the Web3 segment regulation in the U.S.:
During the court hearing, the judge highlighted that a DAO acts as a "person" under the Commodity Exchange Act and should be held liable accordingly.
In Europe, discussion about regulation for DeFi is underway
This is the first court decision that clarifies that the DAO status will not help to circumvent trading and investing regulations.As covered by U.Today previously, in Europe, industry representatives are trying to exclude decentralized services from Data Act regulations.
As per a public letter signed by Polygon Labs, Ledger and other crypto heavyweights, regulators should not treat smart contracts and systems based on them (DeFis, wallets) as data.