DAO’s increasing interest is spiking the age-old question again regarding their legality according to the SpankChain CEO and creator of the decentralized autonomous organization called the Moloch DAO Ameen Soleimani which we are about to find out more in the blockchain news today.
After the infamous hack that harmed ‘’The DAO’’ or more than $60 million, the developers are now hesitant to kickstart the new projects in its likeness. DAOs were the very controversial topic at the recent ethereum gathering in Berlin which followed the announcement in early August of the new DAO spearheaded by Web Foundation executive Ryan Zurer. The ConsenSys-backed blockchain startup OpenLaw is trying to answer the question about the legality of the DAOs saying that earlier this month a new vision of the DAO projects will be focused on legal compliance. OpenLaw stated:
“OpenLaw will help to resurrect the initial vision of The DAO in a manner that comports with U.S. law.”
The legal compliance will pave the way for other DAO projects to gain more legitimacy in the investors’ eyes at least according to the OpenLaw CEO Aaron Wright:
“Even if there wasn’t an issue on the technical side,” Wright said of the original DAO, “even if there wasn’t that attack, there would have been significant regulatory issues, at least in the U.S. and other jurisdictions.”
Wright says that if this is done correctly, the DAOs will have the potential to replace venture capital and the private equity firms which could be a monumental achievement in fueling the future of blockchain networks development. The question remains how to make DAOs legal. With the DAOs increasing interest, first to do is to structure your DAO as a business entity registered under US law. The blockchain lawyer Andrew Hinkes explained for the cryptocurrency news:
“Operating as a [LLC] means the entity is responsible for contracts and the entity is responsible for taxes and the entity is responsible for violations of the law, not necessarily the individuals who are acting on behalf of the entity. In The DAO hack, where one third of the ETH was spun into a child DAO by the attacker … there was a pretty decent argument to be made that anybody damaged could sue anybody involved. That would have been disastrous.’’
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