The CFTC fined the blockchain protocol the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain. bZeroX $250,000 and sued its successor project, Ooki DAO.
- The CFTC issued a federal civil enforcement action against a DAO.
- Ooki DAO was accused of trading commodities without a license.
- The move drew criticism and a CFTC commissioner objected.
The Commodity and Futures a futures contract is a standardized legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Trading Commission (CFTC) has for the first time filed a federal civil enforcement action against a decentralized autonomous organization (DAO) for alleged cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. trading violations.
In a press release Thursday, the CFTC issued an order of filing and settlement of charges against the protocol of software blockchain bZeroX and its founders. The regulatory agency said the project and its founders, Tom Bean and Kyle Kistner, acted illegally by facilitating retail commodity transactions on margin and leverage.
According to the order, the defendants profited by bZeroX which operated similarly to a trading platform, to conduct trading activities in digital currencies as commodities that only CFTC-registered traders can conduct. The charges included a USD $250,000 fine and a cease and desist order.
CFTC goes against a DAO
In the same release, the CFTC stated that it was simultaneously filing charges against Ooki DAO decentralized autonomous organization, system of rules that define how a decentralized organization should operate and which actions it should take. the successor to bZeroX for allegedly violating the same laws.
Similar a bZeroX, the DAO allowed users to take leveraged positions, but never registered with the regulator, regulators alleged. The DAO and its founders, who operated the same software que bZeroX, also failed to adopt know-your-customer (KYC) procedures required under the Bank Secrecy Act, the CFTC said.
Regulators seek restitution, reimbursement, civil monetary penalties, trading and registration bans, and injunctions against further activity. The news agency Blockworks noted that this is believed to be the first time the regulator has brought such a case against a DAO.
“ These actions are part of the CFTC’s broader efforts to protect U.S. customers in a rapidly evolving decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. financial environment. ” said Gretchen Lowe, interim chief compliance officer, in the statement.
Trading of digital digital technologies are these electronic tools that have the ability to generate, store or even process data. assets on margin, leveraged or funded that is offered to U.S. retail customers must occur on properly registered and regulated regulation is when something is controlled by a specific set of rules. exchanges in accordance with all applicable laws and regulations. These requirements apply equally to entities with more traditional business structures, as well as to DAOs. .
One commissioner criticized the actions
The enforcement action against the DAO, which has since been settled, provoked some criticism among observers and even a member of the CFTC. As reported by Cointelegraph the commissioner Summer Mersinger expressed her disappointment to the agency’s actions and argued that the enforcement agency was entering into a “ uncharted legal territory “by taking action against members of a DAO. The media quoted the statements of the official:
I cannot agree with the Commission’s approach of determining the liability of DAO token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. holders based on their participation in the governance in the world of cryptocurrencies, governance is defined as the people or organizations that have decision-making powers regarding the project. vote for a number of reasons.
“ We cannot arbitrarily decide who is responsible for these violations based on an unsupported legal theory that amounts to regulation by enforcement while federal and state policy is being developed. “he added, as quoted by CoinDesk .
Other community users also voiced their dissatisfaction; among them the lawyer and head of policy at Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. Association Jake Chervinsky, who said on Twitter that the enforcement action “may be the most egregious example.” of that agency’s regulatory approach. “ We’ve complained a lot about the SEC abusing this tactic, but the CFTC has put them on the spot. .”
The bZx action doesn’t mean we should abandon the DCCPA, the bill giving the CFTC jurisdiction over digital commodity trades. It means we should work harder to amend the bill so the law is clear: regulations designed for legacy institutions don’t apply to decentralized protocols.
– Jake Chervinsky (@jchervinsky) September 23, 2022
- CFTC Chairman says cryptocurrencies should be regulated like commodities
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- A DAO wants to go to the moon a situation where there is a continuous upward movement in the price of a cryptocurrency. Often used in communities to question when a cryptocurrency will experience such a phenomenon, saying “When moon?” It is usually combined with “When Lambo?” (literally), and has already sent someone into space.
Article by Hannah Estefania Perez / DiarioBitcoin
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