The third article in our Blockchain and the Law
series
On 17 June 2016, USD 60 million was siphoned from Ethereum's
first decentralised autonomous organisation (DAO). The affected DAO
is simply (albeit confusingly) called "The DAO", a
digital, autonomously run investment-fund which, like traditional
mutual funds, allows investors or "members" to purchase
shares and enjoy returns based on its performance. As part of the
heist, the attacker shifted the ether to a "Child DAO", a
kind of subsidiary of The DAO itself. For now, the ether remains in
the Child DAO and in accordance with its programming, cannot be
used for 28 days from the date of the attack. Members of Ethereum
and the broader blockchain communities are emphasising that the
exploited vulnerability was in the coding of smart contract within
The DAO; the underlying Ethereum platform (as well as blockchain
technology) is, they say, faultless in the incident.
