CandleFocus

Rejects Lido’s Claim as a Non-Entity, Finding DAO Participants Liable Despite Its Decentralized Structure

Author: Content Editor
A federal court judge has ruled that Lido DAO, the governing body behind a popular liquid staking protocol, can be considered a general partnership under state law. This ruling sets a precedent for how profit-oriented decentralized autonomous organizations (DAOs) should be treated in terms of liability. The court also determined that identifiable participants in Lido DAO managed its operations and therefore could not escape liability despite its decentralized structure. As a result, Paradigm Operations, Andreessen Horowitz, and Dragonfly Digital Management were held liable as general partners based on their alleged active involvement in Lido's management and operations. The ruling came in response to a class action lawsuit brought by a plaintiff who claimed he suffered losses from purchasing Lido's native tokens and accused the DAO of selling unregistered securities.

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