A16z Crypto’s Miles Jennings posted on X that the ruling is a “huge blow” to decentralized governance.
A California judge has ruled that participants in decentralized autonomous organizations (DAOs) can be held liable for the actions of other members under state partnership laws.
On Nov. 18, Judge Vince Chhabria of the United States District Court for the Northern District of California determined that governing bodies behind Lido DAO qualify as partners under California’s general partnership laws. As a result, members may not avoid liability for the organization’s actions.
The lawsuit stems from a complaint by Andrew Samuels, who purchased tokens issued by Lido DAO. The investor sued the entity to recover his losses. Samuels alleged the tokens were unregistered securities, arguing that Lido DAO should have registered them with the US Securities and Exchange Commission.
