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Ooki DAO, a decentralized autonomous organization that is also a successor of bZeroX has called on its community for support in response to the lawsuit that the United States market regulator, the Commodity Futures Trading Commission (CFTC) filed against it.
Consequently, the protocol has listed a number of suggestive options as an appropriate response to the lawsuit, urging members of the DAO community to choose.
To begin with, Ooki suggests that Ooki treasury funds should be allocated to be spent to retain legal counsel to represent Ooki DAO members. Secondly, is the Ooki DAO voting to approve the allocation of Ooki treasury funds for the DAO to continue operating and consider any future contingency runway. Next, the DAO voting is billed to approve releasing a Non-fungible token (NFT) to support Ooki DAO’s legal defense.
In no particular order, the last suggestion is Ooki DAO voting to approve submitting a legal defense fund grant request on Gitcoin for members of the broader blockchain and Decentralized Finance (DeFi) community to support the legal defense of Ooki DAO. Members of the community are expected to vote in favor of any of the aforementioned response options to CFTC.
From the outlook of the lawsuit, if not duly mitigated, Ooki DAO believes that it would affect the entire DAO community as well as the crypto ecosystem.
“All DAO token holders could be found liable for any alleged wrongdoing based on DAO voting participation. As a result of this, the outcome of the Ooki DAO CFTC case could serve as precedent for other DAOs in the cryptocurrency space and have far-reaching implications for the entire cryptocurrency space as it pertains to liability of DAO voting members.”
Was CFTC Lawsuit Against Ooki DAO Necessary?
Additionally, the DAO is seeking donations from the crypto community to back its legal defense and support teams. So far, the protocol has received support in form of backlash for the CFTC, some of its Twitter followers have said that the U.S market regulator is only targeting ‘smaller players’.
CFTC Commissioner Summer Mersinger also expressed her displeasure at the lawsuit.
“I cannot agree with the Commission’s approach of determining liability for DAO token holders based on their participation in governance voting…Although there are no allegations of any fraud having occurred here, we all are mindful of the need to protect customers who are participating in the largely unregulated crypto space,” she said, adding that “..those good intentions do not entitle the Commission to act through enforcement without proper legal authority, notice, or public input.”
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