BlockBeats news, on November 19, according to Decrypt, the federal court for the Northern District of California ruled that Lido DAO can be considered a general partnership formed under state law. The court dismissed Lido's claim that it is not a legal entity and classified it as a general partnership, setting a precedent for the treatment of profit-driven decentralized autonomous organizations (DAOs).
The court also ruled that identifiable participants in Lido DAO manage the operations of the DAO, thus cannot escape liability through its decentralized structure. According to court documents, Paradigm Operations, Andreessen Horowitz, and Dragonfly Digital Management were accused of being general partners because they allegedly actively participated in Lido's governance and operations.
Miles Jennings, general counsel and head of decentralization at a16z crypto, stated in a statement that the judge's decision is a significant blow to decentralized governance. He pointed out that under the ruling, any participation in a DAO (even posting on forums) may be sufficient to hold DAO members accountable for the actions of other members under general partnership laws.