PANews reported on November 19 that according to Decrypt, the U.S. District Court for the Northern District of California ruled that Lido DAO can be regarded as a general partnership and its members must bear legal responsibility for its operations. The court rejected Lido's claim that it is a non-legal entity and determined that Lido participants profited through governance and operations and could not evade responsibility due to the decentralized structure.
The ruling states that members holding Lido governance tokens (LDO) make decisions and profit from staking rewards, constituting a partnership. In addition, although Lido did not sell tokens directly, its advertising and promotion of tokens through cryptocurrency exchanges was considered a securities sale and still required legal liability.
The case sets a new precedent for the legal status of decentralized autonomous organizations (DAOs) and the liability of their members. Miles Jennings, a16z crypto legal counsel, expressed concern about the ruling, saying it could make any form of DAO participation (such as forum postings) a basis for partnership liability.
