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“When a DAO comes into contact with general partnership law, something bad happens.”

That was said by our EIC Nilay Patel on an episode of the podcast Decoder last year about decentralized autonomous organizations.

Now, a lawsuit won by the Commodity Futures Trading Commission (CFTC) against something called Ooki DAO establishes that these crypto-era decentralized finance (DeFi) orgs can be held liable for breaking the law.

CFTC Division of Enforcement Director Ian McGinley:

The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability.

This decision should serve as a wake-up call to anyone who believes they can circumvent the law by adopting a DAO structure, intending to insulate themselves from law enforcement and ultimately putting the public at risk.