Decentralized Autonomous Organizations(DAOs) are under attack to restrict the inevitable take over of traditional investment products

One of the things we've often discussed as a key structure for building the future of the Internet "Web3" and that of financial transactions and business operations "crypto and blockchain" has recently been the term "DAO".

A DAO is a decentralized autonomous organisation which exists on the concept of "distributed" decision making process for the facilitation of diverse on-chain transactions, off-chain transactions and more. The goal of the DAO has primarily been to give network participants more influence over the activities therein.

Decentralized Finance projects had quickly eaten up this concept and today we have so many "supposed" DAOs out there for numerous DeFi projects(mostly on Ethereum and BSC). Now don't be fooled, just as many blockchains are centralized pieces of crap funded by money thirsty venture capitals, the concept of DAOs has largely been leveraged to deceive people. Majority of them are not decentralized talk less of being "autonomous".

Notwithstanding, this does not mean the government authorities will go after one and let the others survive especially when they literally threaten the banking system.

Ooki DAOs Gets Fucked

As per a statement shared by the CFTC, the U.S. District Judge treated a decentralized autonomous organization (DAO) as a "person" in a recent ruling. This document is a crucial precedent for Web3 regulatory frameworks in the U.S.

On June 9, 2023, the U.S. District Judge William H. Orrick ruled that Ooki DAO violated the law by operating an illegal trading platform and acting as a futures commission merchant.

The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability This decision should serve as a wake-up call to anyone who believes they can circumvent the law by adopting a DAO structure, intending to insulate themselves from law enforcement and ultimately putting the public at risk

This is rather an interesting case that should really be worrisome to the entire crypto ecosystem as though it somewhat threatens the sovereignty of financial networks within the space. When you look at the Ooki DAO the figures do appear rather deceptive and their interest on loans are just crazy for such an off the radar project with not a lot of profitable investment arms to handle such interest payments without putting investors money at risk. While I've never actually supported DAOs unless they were hardcoded in a blockchain network(many are not), these manipulative structures that carry the word "decentralized" and "autonomous" while doing quite the opposite has been crap to me, I however find this news worrisome.

Primarily, my worries here of course isn't that this tokenized margin trading platform/DAO was pulled by the Commodity Futures Trading Commission (CFTC) but that the U.S District Judge and the CFTC reference Decentralized Autonomous Organizations(DAOs) in its recent rulings a "person" as opposed to how nodes on Bitcoin(for example) as treated. Yes, these are two very different things especially because Bitcoin is a proof of work chain flexing it's energy governance structure and SHA-256 security structure while DAOs are typically token-based governance structures that could most definitely fall under securities with the way the SEC is moving crazy and terming everything unregistered security lately.

Now that DAOs are treated as a person, this I assume gives the system an edge and advantage of strings to pull on. The entire Ethereum DeFi space could all be charged of operating illegal trading platforms and this would simply limit the ecosystem's ability to expand its finance and investment products or services not go talk of the billions of out-flow that would occur. A part of me believes this is being done so as to put this power in the hands of centralized institutions like JPMorgan Chase and its recent blockchain for the tokenization of traditional assets, the Onyx Blockchain.

Crazy to think all of these are happening at once and the markets seem to be reacting accordingly, a signal for the last blood shed we may experience before a bull run perhaps? Maybe, just maybe.