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Dissenting Statement of Commissioner Summer K. Mersinger Regarding Enforcement Actions Against 1. bZeroX, LLC, Tom Bean, and Kyle Kistner; and 2. Ooki DAO

posted 10 months ago

The CFTC is made up of five commissioners, one of whom is the chairman. All of them were appointed at the beginning of 2022, and one of them issued a dissenting opinion on the bZeroX and Ooki DAO CFTC case. A dissenting opinion has no “procedural” weight and is an institution that allows members of anybody or any institution to publicly voice their opposition to a stance or decision enacted by an institution they are a member of. This is useful to be aware of, just so we know that not everyone in the CFTC has the same opinion. Below I will provide a TL:DR of the dissenting opinion:

Absence of Applicable Legal Authority

The first point from the opinion is somewhat moot, since it only states that the CFTC should not have made the members of the DAO liable under the article of the CEA (Commodities Exchange Act) they chose, but under another article. With the practical effects being the same, the members would be held liable by virtue of one or the other provision; but lawyers bicker about these things, and if you were under the same scrutiny as the Ooki DAO, I would try to do the same.

An Arbitrary, Unfair and Misguided Definition of the Unincorporated Association

This point is only somewhat valid. The opinion points out that it makes no sense that the members being held liable are the members that participated in voting, while token holders that have never voted are not liable, by which, as the opinion points out, the CFTC is punishing members that might want to effectuate change and comply with regulation. There is only a sliver of theoretical legal credence to what the opinion is detracting from the CFTC’s view, which is essentially trumped by virtue of how simple the CFTC’s stance for liability is. If you voted, you are liable. A future case might come along where voting is not necessary, and the same can be applied for members that “participate” in the DAO, whatever that participation might entail.

Regulation by Enforcement

Even though the opinion raves about how blatant and ungraceful the stance of the CFTC is, this point just laments the fact that the CFTC has not done enough public discussions, roundtables, calls for opinions, etc, to gather as much data on the subject in question, and just decided, yes, we (the CFTC) will file a complaint and go to court and see how this pans out, instead of talking about how this should be regulated.

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