The Delaware corp acts as a service provider to the offshore foundation. The DAO and it’s treasury are directly tied to the BVI foundation.
The advantage of this is that if the equity ends up having value in addition to the token, then you have a nice Delaware corp to wrap that equity value in.
Very interesting to see similar structures with crypto startups as they launch protocols/foundation tokens. I guess the commonalities have to do with the treasury aspects, right?
If an industry needs "more legal flexibility" that just screams scam to me.
This is a heck of a claim given that stimulus checks were issued by the US Treasury, not the Fed.
IIRC Stem cell reserarch is limited in the USA given the puritanism in its society and laws.
I wouldn't say that Stem Cell therapy is a scam per se.
Sometimes, laws fall behind progress in some countries.
Here in mu country there are A LOT of stem cell related scams. But that doesn't mean there's not some real R&D going on .
Why is crypto avoiding US laws?
Edit: Also, a quick Google of top stem cell research companies show that they are based in the U.S. or Europe, so I’m not sure how correct the claim of US avoidance is. But even if they are avoiding the U.S., they are choosing Europe instead, where “legal flexibility” is still not a thing.
More importantly, a large portion of the economic value of many projects passes through these informal, legally untested structures. And, as anyone who has read ICO white papers and read through the “tokenomics” can tell you, a significant portion of that economic interest is held by VC “whales” such as Binance and A16Z (greater than 5% = significant).
There may not be blood, but there will definitely be a whole lot of lobbying.
>If all of this gets classified as general partnerships
to literally mean all as opposed to only those DAOs that in fact are General Partnerships.
Either way, it’s nothing new in law nor surprising. I’m not saying their isn’t legal risk or potential liability issues, but it’s certainly not something A16Z isn’t aware of, they have written about the legal issues pertaining to DAOs extensively, just one example: https://a16zcrypto.com/wp-content/uploads/2022/06/dao-legal-...
These guys know they’re playing with fire. They assume they can buy their way out of legal problems — which, well, it’s America in 2022. It’s probably true!
Again I’m in agreement there is always potential liability and risk, and notwithstanding their activities I think we can both safely and fairly assume AZ16 has at least competent legal representation that advises them nearly every step of the way and minimizes any legal risk and potential liabilities. Beyond that, without specific examples I just wouldn’t speculate, but as a simple example going back to the idea of DAO without a legal entity being treated as a General Partnership resulting in joint and several liability, yes that could be very bad for you and me if we invested in tokens in our individual capacities because we could have unlimited personally liable, but I’d be shocked if AZ16 didn’t use separate legal entities as investment vehicles for each DAO investment, meaning under the same set of facts their liability though unlimited like you and I personally, would in practice be limited to their investment via the separate investing vehicle.
In terms of not mentioning securities in that publication, no I’m not surprised. Not because it isn’t a very important issue, but securities issues and analysis is independent of the legal framework being discussed, which they are defining as the legal entity, tax and operational considerations. They might have other publications with respect to securities, but if I were their lawyer, I’d advise against it.
Yet, the US government successfully indicted and got the four founders to surrender [1] (two of whom were non-US citizens).
They can definitely claim jurisdiction if American users were affected in the scheme.
1 - https://www.coindesk.com/markets/2021/03/15/bitmex-founder-b...
Why? These ~~marks~~ investors wanted free unregulated finance on the blockchain, and they got it. Where's the crime?
People who spent money on Terra/Luna knew it was a cryptocurrency that used magic computer maths to make numbers get bigger (until number got small), same as all the other cryptocurrencies.
So no, it's still a ponzi, and no, most people had no idea.
https://www.politico.eu/article/wife-of-us-diplomat-anne-sac...
At core, as with most things, it's unfortunately a question of power, not legality ...
If they had just done shit by the book they would have had him on US soil with no problems at all.
FWIW I don't agree that he -should- be able to be extradited. Just stating the fact that if the US had just not screwed the pooch they would have been successful in doing so.
That's not to say that some suits won't be brought but even if bzx lost their case it would not be necessarily a reflection on other legal or political arrangements.
Have you, uh, met America?
Not only is America litigious, the long arm, when sufficiently motivated, will get you anywhere on the face of the planet. Just ask Assange. Not that I support this behavior, or this privilege, but I'm not ostrich enough to pretend it's not on the table.
> dao is a loosely defined word, except where legally defined and protected as in Wyoming
That may matter in Wyoming, but in America, I assure you, the 'ill defined' nature won't stop the prosecutors.
I don't think he dedicated his life to denouncing all morally questionable government actions everywhere. He ruined his own life by denouncing what the NSA was allegedly doing back then. I'm not sure I can demand that he should ruin his life even more by annoying the Russian government.
But he probably doesn't get any favors from Russia because he's not useful to them.
Looking very closely at the link you give in another document, you have to specifically go through a registration process to register as a DAO in Wyoming, and get the legal benefits of becoming a LLC.
> At any rate, no, there is no way that any online organized group of people will be determined to be legally and universally and internationally jointly and severally liable.
That's not how the law works. If you've got (a) two or more people that (b) agree to do something in partnership [it does not need to even be a written agreement], then by default, you have created a general partnership. An "online organized group of people" is--you guessed it--a group of two or more people that agreed to do something in partnership, so you've got a general partnership, unless someone has a quantum of legal knowledge and takes steps to form any kind of legal governance other than a general partnership. And you've got any legal knowledge, you'll avoid a general partnership, because that means every partner is jointly and severally liable.
Sure, you can override this if you take the proper legal steps. But given how much the crypto community seems to spend trying to claim the law doesn't apply to them (e.g., code is law), I'm skeptical that very many DAOs have taken the appropriate legal steps to avoid forming a general partnership.
That's an assertion that may be tested when there are tens or hundred of millions of dollars at stake. In our everyday lives how you would go after something like a DAO is not at all obvious. But that doesn't mean there are ways.
And you are right to say it will be a reflection of other legal and political arrangements.
So there's already an exception to disprove this "universal, international, jointly and severally liable" theory that is going on in this thread. OP was mentioning A16z and the like as if they are not shielded from personal liability for lawsuits targeting the companies they invest in. That's not to say that a16z cannot be sued. But the individual investors that are part of it, that participate in rounds, being sued on a personal level as if they are "jointly and severally liable partners", that is not going to happen. Sorry. Even if Bzx loses their case, the facts of the case are material. The facts of each unique situation matter. Even within the United States.
Just as a thought experiment: if a DAO was created by 7 random people on the internet from Dubai, Latvia, Colombia, Australia, Singapore, Switzerland, and Taiwan, how exactly would you go about bringing a lawsuit against them from the United States? And how would you target them on a "jointly and severally liable" basis?
Sue the Australian in the Australian court--common law jurisdiction, so it's going to be quite similar to US laws, and personal jurisdiction over them in Australia isn't going to be hard to establish. I get the judgement against them for the full amount, and it's their problem to get the other 6 people to pony up their share. That's what "jointly and severally liable" means: I only need to go after one person for any claims I have; it's their problem to get the pain distributed.
Isn't this only relevant when ash organization takes the legal steps to register as a DAO in Wyoming? If that is not the explicit corporate governance model, then a default structure is assumed.
Analogously, my state (Virginia) has laws on the books limiting my personal liability for judgments against my business iff I register that business as an LLC. If I don't do so, then the business is considered a sole proprietorship, and I can be sued personally for harms my business causes.
For your thought experiment: maybe try to use something from the CFT spectrum, because that you can make stick with a lot of places in some form or another? So not really simple civil law and probably not straight forward (could it even work?)
https://www.skadden.com/insights/publications/2022/05/putati...
You are going to see a lot of political maneuvering by the sorts of A16Z, Binance, FTX, Galaxy Digital, and — dare I say it — Y Combinator, to keep cases like this from getting very far. If all of this gets classified as general partnerships engaged in securities law violations (and worse, as per Terra/Luna), a lot of arrogant investors and market boosters will find themselves in more trouble than they imagined.