CandleFocus

Can DAOs Be Sued? Insights From Lido’s Recent Case

Author: Content Editor
A recent decision by the US District Court for the Northern District of California has cast doubt on whether decentralized autonomous organizations (DAOs) provide the liability protection they were once believed to offer. The court ruled that prominent investment firms managing Lido DAO's operations may be liable for its wrongdoings, suggesting that Lido DAO is not truly decentralized or autonomous. The court also raised questions about the liability of DAO participants and the classification of DAOs as general partnerships under California law. The decision could have significant implications for participants in DAOs, as they may be held responsible for the actions of the protocol and subject to lawsuits solely for voting on proposals. The outcome of this case may impact the future of DAOs and their ability to continue pushing boundaries in the crypto industry.

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