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ARTICLE · 02 FEBRUARY 2025

We Can DAO It! Navigating Legal Challenges And Solutions For Decentralised Autonomous Organisations

In a recent ruling of Andrew Samuels v. Lido DAO,[i] the United States District Court for the Northern District of California ("Court") addressed the legal complexities surrounding decentralised autonomous organisations ("DAO").

United Arab EmiratesLitigation, Mediation & Arbitration

KEY TAKEAWAYS

  • TheAndrew Samuels v. Lido DAOcase highlights the risk of DAO participants being held personally liable under state partnership laws.
  • Unincorporated DAOs are exposed to unlimited liability and lack legal entity protections, complicating regulatory compliance.
  • Incorporated DAOs usually provide legal protections and structured governance frameworks.
  • ADGM and RAK DAO offer tailored solutions for DAO incorporation, supporting decentralised operations within a legal framework.
  • The ruling could signal a global trend towards stricter DAO accountability, challenging their decentralised ethos.

INTRODUCTION

In a recent ruling ofAndrew Samuels v. Lido DAO,1 the United States District Court for the Northern District of California ("Court") addressed the legal complexities surrounding decentralised autonomous organisations ("DAO"). The Court declined to dismiss allegations against Lido DAO,2 a leading Ethereum-based staking protocol, finding

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