A U.S. federal judge ruled on November 18 that members of decentralized autonomous organizations (DAOs) could be held liable for the actions of other members under state partnership laws.
The case stemmed from a lawsuit filed by Andrew Samuels, an investor who purchased tokens issued by Lido DAO and sought to recover losses, arguing that the tokens were unregistered securities.
The judge, Vince Chhabria, determined that Lido DAO qualifies as a general partnership under California law, meaning that its governing bodies, including institutional investors like Paradigm Operations, Andreessen Horowitz, and Dragonfly Digital Management, could be held accountable for its actions.
The decision effectively makes DAO members vulnerable to liability for actions taken by other members, a significant shift in how decentralized entities are viewed under U.S. law. While Robot Ventures was dismissed from the case due to insufficient evidence of its partnership role, the ruling is seen as a major challenge to the concept of decentralized governance.
Legal experts, including Miles Jennings, general counsel at a16z Crypto, described the decision as a “huge blow” to DAOs, suggesting that even minimal involvement in a DAO’s governance, such as posting in forums, could now expose members to legal consequences.
This development marks a significant moment in the ongoing debate over how DAOs should be regulated and the responsibilities of their participants.
Kazakhstan is taking a major step toward integrating digital assets into its national financial strategy, with plans to establish a state-managed crypto-reserve.
The first week of July brings several important developments in the United States that could influence both traditional markets and the cryptocurrency sector.
Ric Edelman, one of the most influential voices in personal finance, has radically revised his stance on crypto allocation. After years of cautious optimism, he now believes that digital assets deserve a far larger share in investment portfolios than ever before.
In the case involving Terraform Labs and its co-founder Do Hyeong Kwon, the defense has asked the Federal Court for the Southern District of New York to extend the deadline for pretrial filings by two weeks, pushing it beyond the original date of July 1, 2025.