The UK Law Commission, a government body responsible for legal reform, has stirred the pot in the world of Decentralized Autonomous Organizations (DAOs). Their recent scoping paper suggests that DAOs can likely be accommodated within existing legal and financial frameworks, rather than requiring a whole new legal entity.
This stance comes despite the paper acknowledging the lack of a universally agreed-upon definition for DAOs. The paper highlights the diverse nature of DAOs, ranging from fully decentralized structures to hybrid models incorporating traditional legal entities. This heterogeneity makes crafting a “one size fits all” law for DAOs challenging.
The Law Commission proposes focusing on adapting existing regulations instead. One area of focus is trust law, which is already under review by the Commission. This review will explore the possibility of more flexible trust structures, potentially benefiting DAOs that utilize trust-like mechanisms.
Another key takeaway is the call for international cooperation on DAOs. The Commission emphasizes the need for a globally coordinated approach to Anti-Money Laundering (AML) and tax regulations for DAOs. This collaborative effort is crucial for navigating the complexities of these borderless organizations.
The Law Commission’s decision has sparked discussions within the legal and crypto communities. While some view it as a pragmatic approach, others may advocate for a more tailored legal framework for DAOs.
Also Read: UK Crypto Crackdown: £1 Billion Exchange Busted, Binance Lawsuit Looms, New Regs Incoming!
This news comes alongside a warning from the Solicitors Regulation Authority (SRA) regarding a Bitcoin scam involving impersonation of legitimate law firms. The SRA urges individuals to exercise caution when dealing with unsolicited legal correspondence, particularly involving cryptocurrency transactions.
Overall, the UK Law Commission’s stance on DAOs reflects a cautious yet progressive approach. By leveraging existing legal structures and fostering international collaboration, they aim to integrate DAOs into the current regulatory landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
