Crypto enthusiasts dreamed that DAOs (decentralized autonomous organizations) would be able to operate without the involvement of the state and courts. But reality shows that even code that is "law" is not immune to legal problems.

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What is a DAO?

A DAO is an organization that works through smart contracts, where decisions are made by voting of its members. In theory, it's "anarchy with code": no bosses, bureaucracy or physical offices. But imagine the situation: someone hacked the DAO and withdrew funds. Who is responsible?

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DAO vs. Law: High-profile cases

1. The DAO (2016): a story of failure. The DAO, which raised $150 million in $ETH , was hacked due to a code bug. This led to the hard fork of Ethereum, but the problem remained: Who is to blame? Developers? Voting members? The hackers themselves?

2. Ooki DAO: the first legal precedent. In 2022, the US Commodity Futures Trading Commission (CFTC) sued The DAO for violating securities laws. The CFTC ruled that all members who voted were responsible for the organization's actions. The irony is that decentralization has become a trap here.

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Legal challenges to the DAO

1. Legal status. Most countries do not have laws that recognize DAOs as legal entities. This means that the organization cannot sign contracts or answer in court.

2. Responsibility of participants. DAO participants can be held collectively liable for any violations, even if they did not actively participate in the decision.

3. Taxation. Does The DAO have to pay taxes? If so, who does it: the code or the participants?

4. Jurisdiction. The DAO exists on the Internet, but in which country is it judged? This question still remains open.

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Is there a future for DAOs?

Despite all the difficulties, DAOs continue to develop. For example:

MakerDAO (responsible for the DAI stablecoin) is stable and proves that DAOs can be financial players.

Uniswap DAO operates one of the largest decentralized exchanges.

However, legal problems do not disappear. If DAOs want to survive, they will have to adapt to legal norms, or their members risk being sued.

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Conclusion: Is the world ready for DAOs?

The DAO is a governance revolution facing legal chaos. The code may be law, but state courts are not yet ready to accept it. So, before you become part of a DAO, think twice: are you ready to be responsible for what others have programmed?

The DAO is the future, but a future that depends on harmony between decentralization and law.

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