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As we discussed in Part 1 of the Ooki Saga, the CFTC managed to drop a bombshell in the civil enforcement action against Ooki DAO by arguing that a DAO is an unincorporated association and everyone who voted its governance token is a member of the association with unlimited liability.

But the CFTC was not done yet—it convinced the court to permit service by providing “a copy of the summons and complaint through the Ooki DAO’s Help Chat Box, with contemporaneous notice by posting in the Ooki DAO’s Online Forum.”

Service of process has always had a colorful side to it. One person who refused to accept service of process was tricked to accept a registered letter containing the service of process papers thinking that it was the required step to claim a mountain bike won in a raffle.1 The SEC served Do Kwon, the elusive founder of Luna, when he came to the United States to speak at a conference (the Second Circuit agreed that this service was proper, over the objections of Kwon). Courts have permitted service of process by email and by posting on a social media page before. But the alternate service permitted by the Ooki court seems to go a bit further—service by email or posting on a social media page is directed to a specific person (i.e., the defendant); service through a help chat box and posting on a forum seems to be the equivalent of service by putting an ad in the paper.2


The Ooki DAO case has, not surprisingly, created a lot of interest in the larger blockchain community and has resulted in a call to arms by the LeXpunK Army3 and the DeFi Education Fund, who have asked the court for leave to file amicus briefs to argue that the court should reconsider its decision to permit service of process by the alternate means requested by the CFTC. Hearings have been scheduled for November; so look for Part 3 of the Ooki Saga then.

Whatever the outcome in the Ooki Saga, DAO developers and users are on notice that U.S. regulators will continue to develop processes by which to ensure compliance with applicable regulations.

1 The fact that he could not remember entering the raffle should have been a tipoff, though.

2 Though, apparently, at least one court held that publication in a newspaper is sufficient. In re Adoption of K.P.M.A., 2014 OK 85, ¶ 37, 341 P.3d 38, 51. In Fortunato v. Chase Bank USA, N.A., No. 11 CIV. 6608 JFK, 2012 WL 2086950, at *2 (S.D.N.Y. June 7, 2012).

3 Lawyers looking for a hip image can enlist here.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


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Author's Assets


Anthony Tu-Sekine | Partner

As the head of Seward & Kissel’s Blockchain and Cryptocurrency Group and a frequent commentator on all things crypto, Anthony advises clients on a wide range of evolving topics, including how to structure and issue security and utility tokens, registered and unregistered offerings of security tokens, token custody, transfer and liquidity issues, non-security opinions, and investments in crypto assets by funds and other investors. A recognized leader on physical precious metals funds, Anthony represented APMEX Inc. and alternative asset manager Sprott Inc. in connection with the launch of OneGold.com, which allows investors to own gold documented on blockchain. He also:

  • Represents ShelterZoom, a leading blockchain-based SaaS contract management platform;

  • Helped form a tokenized hedge fund;

  • Provides advice in connection with ransomware payments made in cryptocurrencies; and

  • Worked with sponsors of bitcoin ETF and OTC products.

“You can work with regulators or you can really try to piss them off… If you really want to do the latter, then you should expect that they will bring every tool they have against you.”

Anthony’s thoughts on BitMEX indictment, as published in Law360 article “BitMEX Case Seen as Blessing in Disguise for Crypto Sector”


Daniel Bresler | Partner

Daniel Bresler is a partner in the Investment Management Group. He primarily represents U.S. and non-U.S. investment managers, commodity pool operators, commodity trading advisors and private funds, including hedge funds, private equity funds and commodity pools. He advises clients on a variety of securities, commodities and corporate law matters, including fund structuring and formation, derivatives regulation and Securities Exchange Act filings. In addition, Daniel assists clients in developing and implementing SEC, CFTC and NFA compliance policies and procedures and guides clients through regulatory examinations. He also represents clients in joint ventures, spinouts and other business transactions.


Philip Moustakis | Counsel

Philip Moustakis is counsel in the Government Enforcement & Internal Investigations and Blockchain & Cryptocurrency practice groups. Philip advises companies and individuals on SEC enforcement matters, other regulatory enforcement investigations, internal investigations, and blockchain-based solutions and digital assets.

Philip has represented investment managers and other financial services clients in SEC investigations involving, among other things, insider trading, market manipulation, valuation, fees and expenses, conflicts of interest, breaches of fiduciary duty, whistleblowers, and compliance and supervisory failures. Philip has advised blockchain and cryptocurrency clients on token offerings, non-fungible tokens (NFTs), and the development of decentralized finance (DeFi) solutions. Philip is quoted frequently in the press on securities law issues affecting private fund managers and blockchain companies.