Deconstructing the DAO: The Need for Legal Recognition and the Application of Securities Laws to Decentralized Organizations

Authors

Laila Metjahic, Benjamin N. Cardozo School of Law

Abstract

This Note will begin with background information on the construction of a blockchain and its function in decentralized organizations like the DAO, followed by a discussion on smart contracts and their role in decentralized organizations and the DAO. This Note will then analyze the legal status of partnerships and joint ventures. This Note proposes that the U.S. legal system must clarify the legal status of these organizations and as such should classify the DAO as a general partnership. Assuming the DAO is a general partnership, the question arises as to whether shareholders in the DAO have interests that would be classified as securities under U.S. securities laws. Given its structure, the DAO and similar decentralized organizations should be classified as general partnerships under U.S. law, with the partnership interests classified as securities subject to securities regulation.

Disciplines

Entertainment, Arts, and Sports Law | Labor and Employment Law | Law | Science and Technology Law

Recommended Citation

Laila Metjahic, Deconstructing the DAO: The Need for Legal Recognition and the Application of Securities Laws to Decentralized Organizations, 39 Cardozo L. Rev. 1533 (2018).
Available at: https://larc.cardozo.yu.edu/clr/vol39/iss4/10