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posted 2 years ago
The Commodities and Futures Trading Commission likes commodities, and it likes crypto, and it would like for crypto to be commodities as well. As it turns out, the CFTC got what it liked, and crypto is now a commodity.
That’s how it got the jurisdiction to fine and sue bZeroX, LLC (Delaware founding company) (hereinafter referred to as: “The Company”); Tom Bean; Kyle Kistner (US citizens, founders of The Company (hereinafter referred to as: “The Founders”) and the Ooki DAO vs CFTC.
To make it as simple as possible, the CFTC has jurisdiction over commodities. One might ask what is considered a commodity? The answer to that is everything, except onions. The US is renowned for its free-range onions. The CFTC is especially interested in special legal and economic agreements that pertain to commodities such as futures, swaps, leveraged trades, margined trades, etc. For all of these actions, you need separate licenses, AML&KYC procedures and policies, a number of other policies and adequate disclosures, which this crypto project did not have, and which is the same set of facts that both the Company and the Founders and the DAO are held accountable for. The project itself offered leveraged, margined and futures trades on DAI/ETH pairs and other tokens, much like AAVE does.
This action by the CFTC was two-pronged. One prong dealt with the founders and the “development” company bZeroX, and the other dealt with the DAO side of things.
The Company and the Founders
Before this case was publicized, the Company and the Founders were confronted by the CFTC, where The Company and the Founders decide to accept the fine and file a non-admission claim which lead to the following consequences:
The Company and The Founders had to pay 250.000,00 USD in 10 days after the order has been published (the deadline passed, and it’s safe to assume they paid).
Cease and desist with all illicit activities.
Waived a number of their legal rights so as to not be able to contest the conditions of the order by the CFTC.
Settled the order with no admission of guilt or damages to anyone.
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