Legal and other issues with Decentralized Autonomous Organizations or DAOs
In this article, I highlight a few problems with DAOs. The laws make it such that DAOs render members to unlimited liability arising from other members’ actions, DAOs cannot hold property in its own name, DAOs create tax problems for members, DAOs’ voted resolutions may not have legal force, and DAOs may be regulated by investment laws. I consider legal issues with setting up, formation or running of DAOs in Singapore.
I’ve suggested two variations of a CLG model to address some of the legal issues.
Conceptually, DAOs run into the trust problem and the skill problem.
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