Croke Fairchild Duarte & Beres Partners Michael Frisch, Andrew Gilbert, and Robert Isham provided updated guidance on decentralized autonomous organizations (DAOs) in Bloomberg Law, a follow-up to Andrew’s initial take on the topic back in August.
Following the collapse of FTX and the landmark Commodity Futures Trading Commission (CFTC) case concerning Ooki DAO, corporate law questions around DAOs are crystalizing through court cases and regulatory enforcement actions. Meanwhile, prices for cryptoassets have begun to rebound. Users and investors who want to safely participate in DAOs are watching current court cases testing the parameters of open legal questions around these structures, including: who bears the burden of accountability, who owes a fiduciary duty to investors, how does a DAO take action and who can effectuate that action on its behalf, who are the equity holders, and how do you know with whom you have co-invested in a DAO?
Michael, Andrew, and Robert take a close look at relevant cases and advise readers on the most prudent steps to take until courts provide additional guidance.
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