CFTC sues Ooki (formerly bZx) for evading regulation using a DAO structure and imposes a $250,000 fine

According to ChainCatcher, The Block reported that the Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Ooki DAO in the Northern District Court of California and imposed a $250,000 fine on Ooki DAO. Currently, the CFTC has reached a settlement with bZeroX, LLC and its founders Kyle Kistner and Tom Bean.

In its complaint, the CFTC accused Ooki DAO of evading regulation through its structure and classified Ooki DAO as "an unincorporated association composed of Ooki token holders, which has never registered with the Commission in any capacity. bZeroX transferred control of the bZx protocol (now the Ooki protocol) to Ooki DAO, attempting to give bZx DAO enforcement capability through its decentralized nature."

It is reported that Ooki was renamed from the DeFi lending protocol bZx, which suffered a hack in 2020 resulting in hundreds of thousands of dollars in cryptocurrency losses. The Ooki community governs the protocol by staking OOKI tokens and voting in the Ooki DAO. (The Block)