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12th January 2023 > > Ooki DAO.


Crunch time for Ooki DAO, and I think it looks bleak.

Market Snap

Market Wrap

Was it only yesterday the CCC commented “Bring on the short squeeze”? Well, there we have it ladies and gentlemen, a spike higher and perpetual futures funding rates straight back to neutral. If you want to know what other commentators are going to say tomorrow, read the CCC today.

But it isn’t just BTC that is rallying.

Risk assets are starting 2023 in vigorous form. Just two months ago 10-year UST yields were above 4% and seemingly were inexorably headed higher. Remarkably, we may now already be nearing the end of rate rises for the UK and the US, with the EU lagging by a little. With the threat of further Covid related market disruptions now receding each day we get nearer to spring, and Putin’s inability to execute his murderous and heinous plan to any meaningful conclusion, the stage is set for optimism.

Curious Cryptos’ Commentary — Ooki DAO (Decentralised Autonomous Organisation)

It is now crunch time for Ooki DAO in its legal battle with the CFTC (Commodities Futures Trading Commission), and it looks like it has lost.

The CCC initially visited this issue on 28th September 2022 (, but a quick recap will be helpful for us all.

Offering derivatives products on an underlying stock, security, or commodity always strays into an area of quite intense regulation. This is an appropriate stance taken by the authorities – derivatives are complex to even seasoned individuals and necessarily involve leverage. Regulatory protection of retail investors is paramount in this field (*) of the investment landscape.

Last year the CFTC filed and settled charges against blockchain protocol bZx (bZeroX) and two of its founders for offering illegal leveraged trading and lending services. By settling with the CFTC, the founders, Tom Bean and Kyle Kistner, avoided criminal charges and potential jail sentences.

What Bean and Kistner did next was not what one would call a smart move.

They set up Ooki DAO, using the same code, with the same client base, and made representations to that client base that the DAO-ification of the protocol would put it beyond regulatory and legislative reach.

Crypto maximalists take this line of argument, and they couldn’t be more wrong. Which is fortunate for the rest of us who wish to see the crypto revolution move into the mainstream, rather than remain the preserve of a minority clique who understand computer code but not necessarily much else about life.

Essentially, Bean and Kistner put up a metaphorical two fingers at the authorities and invited the CFTC to go after them again.

Which is exactly what happened.

In response the CFTC filed an action against Ooki DAO which stated that:

“By transferring control to a DAO, bZeroX’s founders touted to bZeroX community members the operations would be enforcement-proof. The bZx Founders were wrong, however. DAOs are not immune from enforcement and may not violate the law with impunity.”

The action was also filed against Bean and Kistner personally, and – crucially – to all holders of OOKI, the governance coin of Ooki DAO, through an online chat room.

The latter process certainly raised some eyebrows and has two far-reaching, and potentially uncomfortable implications. I won’t go over that ground again here, but if you are interested then the CCC dated 2nd October 2022 ( is - to my knowledge - the only commentary that raises these specific problems.

The CFTC now wants a judicial conclusion to the enforcement action it served on Ooki DAO and its members:

“On December 20, 2022, the Court deemed service on the Ooki DAO of the Complaint and Summons in this action complete as of that date. Pursuant to Rule 12(a)(1)(A)(i), the Ooki DAO’s answer or other responsive pleading to the Complaint was due on or before January 10, 2023. The Ooki DAO failed to answer or otherwise defend as instructed by the Summons and as provided by the Rules."

In essence, the CFTC is asking a federal judge to rule that Ooki DAO and its members have failed to respond to the legal action and therefore, by default, have violated federal commodities laws.

If I was a holder of OOKI I would be getting mightily nervous right now.

(*) It has been reported that the University of South California has banned the use of the world “field” because of its negative connotations in revisiting the horrors of slavery, as in “field of work”.

If any readers of the CCC find my use of the word “field” to be upsetting in any shape or form, or simply unacceptable as is your right, please re-read the first three sentences of “Compliance Stuff” (

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