Home » Blockchain CTFC slammed for ‘blatant regulation by enforcement’ over Ooki DAO case Reading 3 min Views 1 The CFTC’s actions have even been met with strong pushback from its own commissioner, while others have drawn comparisons to the SEC’s regulation by enforcement tactics. The Commodities Futures Trading Commission (CFTC) has sparked strong criticism from the community after filing a federal civil enforcement action against members of decentralized autonomous organization Ooki DAO over digital asset trading violations. In a Sept. 22 release, the CFTC stated that it had filed and simultaneously settled charges against the founders of decentralized trading platform bZeroX Tom Bean and Kyle Kistner for their role in “illegally offering leveraged and margined retail commodity transactions in digital assets” However, the community has kicked up a fuss over a simultaneous civil enforcement action against bZeroX’s associated Ooki DAO and its members, which it alleges it operated the same software protocol as bZeroX after it was passed control of it, and thus “violating the same laws as the respondents.” The enforcement action has drawn the ire of a number of crypto lawyers and even a CFTC commissioner with concerns it will set an unfair regulatory precedent. In a dissenting statement on Sept. 22, CFTC commissioner Summer Mersinger noted that while she supports the CFTC’s charges against the bZeroX founders, the enforcement body is stepping into uncharted legal territory when taking action against DAO members that voted on governance proposals. It's deeply disappointing to see the CFTC damage its own reputation like this among those who care about the future of crypto in the United States, especially at a critical moment while it pitches itself in Congress as the right agency to regulate "digital commodity trades." — Jake Chervinsky (@jchervinsky) September 22, 2022 The DeFi Education Fund also chimed in by noting that the CFTC’s charges also offer a gloomy prospect for people trying to innovate via DAOs. “’Lawmaking via enforcement’ stifles innovation in the US, and today’s action will sadly further discourage any US person from not only developing but also *merely participating* in DAOs,” it wrote. Big picture themes to take away: 1. How much control does a Dao have? if it's too much, maybe it's the counterparty to the transactions offered by the protocol; maybe decentralization of control over the protocol, not over voting to control of the protocol is what matters. /11 — Drew Hinkes (@propelforward) September 22, 2022 The list of charges include illegally offering retail leverage and margin trading; “engaging in activities only registered futures commission merchants (FCM) can perform;” and failing to incorporate a customer identification program under the Bank Secrecy Act. The CTFC also outlined that Bean and Kistner indicated that they wanted to transfer bZeroX over the Ooki DAO as part of a move to avoid crackdowns under the gray area of decentralization. “By transferring control to a DAO, bZeroX’s founders touted to bZeroX community members the operations would be enforcement-proof — allowing the Ooki DAO to violate the CEA and CFTC regulations with impunity,” the CFTC stated.