Court Rules Lido DAO Members Liable Under Partnership Laws
LDO
A US federal judge declared on Monday that Lido DAO, the organization behind a popular liquid staking solution, will be considered a general partnership under state law. This can be considered a landmark decision in the endeavor to give legal shape to DAO.
Lawsuit and Securities Claim
The case was initiated by a suit submitted by Andrew Samuels, an investor in Lido DAO tokens. According to the lawsuit, the tokens are considered unregistered securities, and Lido DAO should have registered them with the SEC. The lawsuit stated:Samuels contends that because Lido DAO never registered the securities, it is liable for his losses under Section 12(a)(1) of the Securities Act,
The court concurred with Samuels that there was sufficient pleading of liability against Lido DAO and its members. According to Judge Chhabria, Lido DAO is a general partnership under California law. This classification ensures that members are answerable to the organization, making it a precedent for DAO governance structures.
Samuels identified four institutional investors as partners in Lido DAO. These include Paradigm Operations, Andreessen Horowitz, Dragonfly Digital Management, and Robot Ventures. He stated that they fall under the state partnership laws as they fall into the governance.
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