A California court ruled that Lido DAO could be considered a "general partnership incorporated under state law."

On November 19th, the US Federal Court for the Northern District of California ruled that Lido DAO can be considered a general partnership incorporated under state law. The court rejected Lido's claim that it is not a legal entity, classifying it as a general partnership, setting a precedent for the way profit-driven decentralized autonomous organizations (DAOs) are handled. The court also ruled that Lido DAO's identifiable participants are managing the DAO's operations and therefore cannot escape liability through its decentralized structure.
According to court documents, Paradigm Operations, Andreessen Horowitz and Dragonfly Digital Management were charged as general partners for their alleged active involvement in the governance and operations of Lido. Miles Jennings, general counsel and head of decentralization at a16z crypto, said in a statement that the judge's decision "dealt a huge blow to decentralized governance." He noted that under the ruling, any DAO involvement, even posting on a forum, could be sufficient to hold DAO members liable under general partnership law for the actions of other members.




Miles Jennings, general counsel and head of decentralization at a16z crypto, said in a statement that the judge's decision "dealt a huge blow to decentralized governance." He noted that according to the ruling, any DAO involvement, even posting on a forum, could be enough to hold DAO members liable for the actions of other members under general partnership law.