Managing cross-border DeFi DAOs in the EU: legal complexities and regulatory perspectives

Abstract

This chapter examines the management of Decentralized Finance (DeFi) Decentralized Autonomous Organizations (DAOs) within the EU's cross-border legal framework, focusing on the implications of the Markets in Crypto-Assets Regulation (MiCA). It discusses the legal structure of DeFi DAOs, the code deference approach, current regulations under MiCA, and best practices for achieving decentralization. The chapter emphasizes the need for clarity in defining ‘full decentralization’ to navigate the regulatory landscape effectively. It concludes that while DeFi DAOs present novel management and governance models, they must operate within the purview of evolving regulations, necessitating informed legal strategies to mitigate risks.