On June 8th, 2023 the District Court, N.D. California awarded default judgment against Ooki DAO for allowing illegal trading of digital assets, engaging in activities only allowed by registered futures commission merchants, and not performing proper KYC. This requires the DAO to pay a more than $640,000 penalty, close down its website, and stop trading.
The decision making process of a DAO starts with token holders proposing amendments to the software that runs the organisation. These amendments are then voted upon in a way that requires at least >50% of votes weighted by token holdings to support the proposal for it to be implemented.
For the DAO to comply with this judgement would require this process to happen successfully in a way that would seem to make the tokens worthless. For the rest of this post assume that does not happen to the extent required for full compliance.
I really do not know the details of what this means, and as I understand it a CFTC notice is on the low end of financial enforcement. However if I was the decision maker for a centralised organisation, I ignored such a judgment and was within the reach of US enforcement I would expect a knock on the door at some point in the future.
Assuming one was a token holder with less than 50% of the tokens (which for anything but complete scams means all token holders) what requirements does this place on you? Would proposing and/or supporting such motions make any difference? Would divesting oneself after the judgement make any difference? What about taking on either initial or further token ownership after the judgement?
