The Law Commission of England and Wales has said it is not recommending a new legal framework for decentralized autonomous organizations (DAOs) as they may still be subject to existing regulations, Foresight News reported.
If a DAO engages in “specified activities” related to “specified investments,” it may be subject to the Financial Services and Markets Act 2000 (FSMA), and when governance tokens look like shares, confer voting rights, and are issued in exchange for investment in the DAO, they are considered specified investments.
The report states that the public law applicable to DAOs will depend on the type of DAO. Some DAOs can be described as unincorporated associations where participants interact according to established rules. Meanwhile, smart contracts can constitute legal contracts.
