A federal court judge has ruled that Lido DAO, the governing body behind a liquid staking protocol, can be treated as a general partnership under state law. The court rejected Lido's claim that it isn't a legal entity and classified it as a general partnership. This ruling sets a precedent for how profit-driven decentralized autonomous organizations (DAOs) are treated. The court also ruled that identifiable participants were managing the DAO's operations and therefore could not evade liability through its decentralized structure. Several investment firms were implicated as general partners based on their alleged involvement in Lido governance and operations. A plaintiff filed a class-action lawsuit against Lido DAO, alleging that the platform's native tokens were sold to him as unregistered securities. The court agreed with the plaintiff's contention and found that Lido DAO's structure constituted a general partnership under California law. This ruling has raised concerns about the ability of individuals in the crypto world to protect themselves from liability through novel legal arrangements.



Other News from Today