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The legal dangers of getting involved with DAOs

Published 01/26/2023, 09:30 AM
Updated 01/26/2023, 09:40 AM
The legal dangers of getting involved with DAOs

Buying DAO tokens? Thats no longer risk-free: Courts might consider you a partner in the business and judge you liable for millions in hacked funds. Another legal trap may be found simply working for a DAO and implementing community decisions that turn out to be illegal in some far-flung jurisdiction.

With many DAO communities waking up to the reality that they need some sort of legal structure or legal personality in order to act in the real world, solutions from mimicking corporate structures to anonymously run foundations are being floated by lawyers around the world.

If a DAO envisions that it might ever need to sign any type of contract, it is not code-based and, by some definitions, not a DAO at all. Source: Pexels
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If the DAO you work for votes to become a crime syndicate, quit and send your tokens to a burn address. Source: Pexels
DAOs were basically designed to cause headaches for legal professionals. Source: Pexels
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