The DAO: from the first big cryptocurrency craze to a new era of legal frameworks

Abstract

This chapter explores the evolution and legal implications of DAOs, starting with the pioneering case of The DAO in 2016. It delves into the legal challenges posed by The DAO, such as its ambiguous legal status, liability issues from code failures, jurisdictional questions, and the classification of its tokens as securities. The discussion then transitions to the broader context of how the concept of a company is evolving in the 21st century economy, highlighting the emergence of new digital social organizations using technology to protect stakeholders, yet failing to provide legal protection for DAO members who face liability risks. The chapter also examines both legislative and practical responses to these challenges, which had already been revealed in The DAO case, including the enactment of specific DAO laws and the adoption of legal wrappers. Finally, the chapter concludes with a call to integrate DAOs into the Swiss legal framework, reflecting Switzerland's progressive stance on blockchain technology.