UK Law Commission: Existing laws are enough
The Law Commission of England and Wales, which reviews and recommends changes to the law to the UK government, said it did not recommend a new legal framework for DAOs. Because these organizations may already fall within the scope of existing regulations, companies need to obtain authorization under current regulations if they operate in the UK.
DAOs may be regulated by the Financial Services and Markets Act 2000
The Law Commission noted in a report published on Thursday that DAOs may be subject to the Financial Services and Markets Act 2000 if they carry out "specified activities" related to "specified investments".
Under this law, when governance tokens are similar to stocks, confer voting rights, and are issued as investments in DAOs, these tokens are considered "specified investments." "Specific activities" refers to specific behaviors or activities related to these investments, such as issuance, sales, promotion, etc.
The UK Law Commission considers uniform legislation inappropriate
Recently, the legal status of DAOs has attracted much attention, and U.S. courts are also exploring how to deal with these organizations. The British Law Commission believes that due to differences between different DAOs, each DAO may apply different laws, and a unified legislative approach may not be appropriate.
The committee stated that at this relatively early stage in the development of the DAO, it does not recommend the establishment of a dedicated legal framework for it, mainly because there is currently no consensus.
The legal status of DAOs varies by type, and complete decentralization does not mean compliance.
The report notes that the public laws applicable to a DAO depend on its type. Some may be considered unincorporated associations, where participants interact according to rules and are only responsible for their own actions. In some cases, DAOs may be subject to corporate tax, and the Committee recommends that international tax frameworks be considered.
From a litigation perspective, a fully decentralized DAO may still face civil litigation from third parties, enforcement actions by regulatory agencies, or criminal prosecution. The summary of the report states that "Smart Contracts can constitute legal contracts."
Law Commission recommends further analysis
The Law Commission of England and Wales has previously helped draft regulations promoting the digitization of documents, which have promoted the use of distributed ledger technology in trade.
The committee earlier this year sought comments on draft legislation that would label cryptocurrencies as property. The report also recommends that bodies such as the Jurisdiction Working Group conduct a more in-depth analysis and recommend that the judiciary, legal committees, regulators and other legal professionals jointly discuss when fiduciary security should be subject to encryption. Currency Developer.
This article DAO does not require special law? The British Law Commission believes the time is not yet ripe appeared first on Chain News ABMedia.
