District Judge William Orrick, of the U.S. District Court for the Northern District of California, ruled last week that LeXpunK Army and the DeFi Education Fund could file amicus (friend of the court) briefs in the CFTC v. Ooki DAO case.

The allowance of these amicus briefs throws what looked like an inexorable case into a puzzle. We now no longer know just how this might resolve, and there's a chance the CFTC’s effort to define a DAO as an unincorporated association might fail.

Something a little strange happened last week. I got back to my hotel room, checked the federal court Pacer database and discovered that a federal judge had, surprisingly, approved a longshot motion by two crypto groups – LeXpunK Army and DeFi Education Fund – to weigh in on the CFTC’s case against Ooki DAO.

The briefs were in by Monday (alongside another motion by Paradigm), and the CFTC has until Nov. 7 (three weeks) to respond. We’ll have a hearing on Nov. 30, where the parties can argue their motions before the court.

There are a few things going on here.

First off, it was surprising when the judge ruled in favor of the CFTC’s motion for alternative service, which allowed the agency to say it had served the Ooki DAO members by posting in a forum and a help bot.

It was also surprising when the judge then allowed the friend of the court briefs, and said, “I interpret these requests as Motions for Reconsideration regarding my decision to permit alternative service in this case,” meaning he essentially paused that previous order.

It seemed a much-needed chance for the Ooki DAO members to continue to figure out whether and how they'll defend themselves in court.

Thus far, the group has not formally responded to the CFTC’s suit, though its website became inaccessible to people with U.S. IP addresses last week.

On the legal front, there's now at least three teams of lawyers arguing that the CFTC should not be able to just serve the entire DAO at once through a chat bot, nor hold the entire DAO accountable as an entity (as opposed to the individual members responsible for any illicit conduct).

The question is how the CFTC should have served Ooki DAO. The regulator is making the case that Ooki DAO is an unincorporated association and so serving the entire entity at once is fair game. What’s more, the CFTC says that because it couldn’t identify any Ooki DAO participants and because it is treating the entire collective as one entity, posting the suit on a forum and a help bot should be deemed adequate service.

The amicus briefs take aim at these assertions in a variety of ways. The LeXpunK brief spells this out explicitly, saying DAOs are not people and arguing the CFTC’s interpretation of a DAO as an unincorporated association does not hold up under federal statute.

We’ll have to wait until Nov. 7 to see what the CFTC has to say about this.

The timeline, in a screen-capable form:

The end of 2022 is fast approaching. The midterm elections are in less than three weeks, so we won’t see much legislative action for a little bit. Here’s where current legislative efforts stand.

The House Financial Services stablecoin bill:

We’ve been hearing a lot about this bill’s development, but at this point it sure seems like it’ll be a 2023 effort. We might still see some kind of draft legislative language introduced this year, but that’s about it.

At DC Fintech Week last week, Rep. Patrick McHenry (R-N.C.), the ranking member of the committee, said he and Chair Maxine Waters (D-Calif.) agreed on how they defined the term “stablecoin” and what the components of the asset include, but suggested that there's still work to be done on other issues like how to assign a federal regulator.

Moreover, at CoinDesk’s IDEAS conference in New York, Rep. Jim Himes (D-Conn.) explicitly said the bill is not happening this year, and is not likely to happen in the early part of 2023.

The Digital Commodities Consumer Protection Act:

The DCCPA is the Stabenow-Boozman bill introduced to the Senate Agriculture Committee by senators Deborah Stabenow (D-Mich.) and John Boozman (R-Ark.) that, if passed, would give the Commodity Futures Trading Commission some more regulatory oversight jurisdiction of crypto spot markets.

Sen. Kirsten Gillibrand (D-N.Y.), who is a cosponsor on the bill, said she expects a markup to occur before the end of the year. In speaking to others, this does seem like it may actually happen, though passage is still a question mark.

If you’ll indulge in some rumor proliferation, the big one right now is that this bill may get attached to the National Defense Authorization Act or another broad bill before the end of the year. I haven’t heard any concrete confirmation of this one way or another, but at the least it does seem like we’ll hear more from this bill before the year’s up.

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If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

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See ya’ll next week!