According to TechFlow, on November 19, Decrypt reported that the United States District Court for the Northern District of California ruled that Lido DAO could be regarded as a general partnership established under state law.
The court rejected Lido’s claim that it was not a legal entity, classifying it as a general partnership, setting a precedent for how profit-driven decentralized autonomous organizations (DAOs) should be treated.
The court also ruled that the identifiable participants of Lido DAO were managing the operations of the DAO and therefore could not escape liability through its decentralized structure. According to court documents, Paradigm Operations, Andreessen Horowitz, and Dragonfly Digital Management were charged as general partners because they were allegedly actively involved in the governance and operations of Lido. However, another Lido investor, Robot Ventures, was dismissed due to a lack of active involvement.
Miles Jennings, the chief legal officer and head of decentralization at a16z crypto, stated in a statement that the judge's decision "deals a significant blow to decentralized governance." He pointed out that under the ruling, any participation in a DAO (even posting on a forum) could be enough to hold DAO members liable for the actions of other members under general partnership law.