Last week, the Commodity Futures Trading Commission (CFTC) simultaneously filed and settled charges against bZeroX LLC as well as its founders Tom Bean and Kyle Kistner for illegally offering leveraged and margined retail commodity transactions in digital assets - activities only registered futures commission merchants can perform in the US, as well as for various other breaches of the US Bank Secrecy Act. The CFTC also filed a federal civil enforcement action in the US District Court for the Northern District of California against Ooki DAO, as bZeroX's successor.
The CFTC reached a US$250,000 settlement with the architects of the Ooki DAO for operating as an unregistered derivatives exchange, and at the same time labelled DAOs unincorporated, for-profit associations in the filing, alleging that members of the DAO were personally liable for the debts of the DAO. It's important to note that this kind of settlement does not create binding legal precedent for future cases, but is often interpreted by the market in deciding how they will behave. It represents an American model of 'regulation by enforcement'.
In the civil enforcement action, the CFTC continues to seek restitution, disgorgement, civil monetary penalties, trading and registration bans as well as injunctions against further regulatory violations. CFTC Chairman Rostin Benham said of the action:
Today’s actions demonstrate the CFTC’s commitment to aggressively pursuing individuals and their operations who purposefully seek to evade regulatory oversight at the expense of retail customers... I commend our dedicated enforcement team for pursuing this scheme which touches on many areas of concern regarding this growing market.
While I do not condone individuals or entities blatantly violating the CEA or our rules, we cannot arbitrarily decide who is accountable for those violations based on an unsupported legal theory amounting to regulation by enforcement while federal and state policy is developing. For these reasons, I am respectfully dissenting in this matter.
Commissioner Mersinger expressed herapproval of the settlement order against bZeroX LLC, noting that there was nothing new or unusual or those charges and that the prosecution did not need to go so far as labeling all the token holders of the DAO as liable in doing so. The main point of Commissioner Mersinger's dissent arose out of the CFTC's classification of the Ooki DAO, which was interpreted as making token holders who voted on governance proposals liable for the debts of the DAO.
Commissioner Mersinger identified the four following points rejecting the CFTC's approach to determining the liability of token holders in a DAO:
First, not only does this approach fail to rely on any legal authority in the CEA, it also does not rely on any case law relevant to this type of action. Instead, the Commission’s approach imposes governmental sanctions for violations of the CEA and CFTC rules based on an inapplicable State-law legal theory developed for contract and tort disputes between private parties;
[Second], this approach arbitrarily defines the Ooki DAO unincorporated association in a manner that unfairly picks winners and losers, and undermines the public interest by disincentivizing good governance in this new crypto environment;
[Third] This approach constitutes blatant “regulation by enforcement” by setting policy based on new definitions and standards never before articulated by the Commission or its staff, nor put out for public comment; and
Finally, the Commission ignores an alternative, well-established basis for imposing liability for the Ooki DAO’s violations of the CEA and CFTC rules in this case – i.e., aiding and abetting liability—that is specifically authorized by Congress and that would solve all of these problems.
Commissioner Mersinger's sentiment is perhaps best summarised in the below comment, which reflects widespread industry view of the serious downsides of 'regulation by enforcement':
The Commission’s approach thus picks winners and losers, in an unfair manner. What is more, it affirmatively disincentivizes voting participation in DAO governance generally—and particularly those who may want to vote in a manner that effectuates change to comply with the law. The Commission’s approach will have a chilling effect that discourages voting, thereby hindering good governance and the development of a culture of compliance in this setting. The unmistakable take-away from the Commission’s definitional approach in these enforcement actions is that those in a DAO community should not vote, even if the governance vote encourages following the law.
The CFTC also put other decentralized protocols on notice in their complaint asserting that any functions which are required to be delivered, decentralised or not, which require registration can only be "lawfully...performed" by a registered market, which of course cannot possibly be a decentralised protocol unless there was a legal wrapper which provided compliance, which would have the effect of severely limiting accessibility.
This problem goes to the heart of the "square peg round role" issue of securities and other laws not accommodating decentralised systems which operate on an open basis, and pose a significant challenge for regulators to solve. The CFTC's approach in this case amounts to a de facto ban on these functions being provided to US citizens, but given they are openly accessible, it may be very difficult for regulators to maintain this approach om future.
Comentarios