A latest ruling from a California courtroom has implications for decentralized autonomous organizations (DAOs), particularly these concerned in Ethereum (ETH) liquid staking.
A California courtroom dominated at the moment that Lido DAO, which manages the Lido liquid staking protocol, is classed as a basic partnership beneath California regulation, that means its members could possibly be held legally chargeable for the group’s actions.
The case was delivered to the courts by Andrew Samuels, an investor in Lido DAO’s native tokens (LDO), who asserted that the tokens ought to be legally considered unregistered securities.
US Decide Vince Chhabria’s ruling confirmed the notion that Lido DAO operates and features as a basic partnership, exposing its members to potential legal responsibility for the DAO’s actions.
In accordance with Andreessen Horowitz (a16z) advisor Miles Jennings, the resolution represents a “big blow” to DAOs.
“In the present day, a California choose dealt an enormous blow to decentralized governance.
Below the ruling, any DAO participation (even posting in a discussion board) could possibly be ample to carry DAO members chargeable for the actions of different members beneath basic partnership legal guidelines.”
This ruling basically contests the concept decentralized buildings can evade authorized accountability.
a16z and different funding companies together with Dolphin, Paradigm and Dragonfly have been all implicated within the ruling as a consequence of their involvement with contributing to the Lido DAO.
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