Hong Kong legislator Johnny Ng has proposed establishing a legal framework to regulate decentralized autonomous organizations (DAOs), aiming to boost the web3 sector in the region.
Ng’s proposal follows a recent Hong Kong High Court ruling involving the Mantra DAO, which required six defendants to disclose financial information about the DAO.
This case is notable as it represents one of the first judicial reviews of a DAO globally. Ng believes that creating a clear regulatory framework could attract international investment and talent to Hong Kong’s web3 industry.
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The dispute with Mantra DAO centers around asset misappropriation claims. Plaintiff RioDeFi argues that it founded the DAO and had hired two of the six defendants to manage it in 2020.
RioDeFi requested the court to obtain financial records from the DAO, citing issues such as halted reports and unexplained crypto wallet withdrawals.The defendants, however, contend that producing these documents would be burdensome, citing a lack of resources. They also argued that decision-making power within the DAO rests with OM token holders.
High Court Justice David Lok responded by asserting that the defendants are responsible for maintaining accurate financial records and should provide these details as required.
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