Andrew Lee Comments on DAOs and Accountability

16 March 2022 The Business of Business News

Foley & Lardner LLP Of Counsel Andrew Lee is featured in the article, “No one knows who’s on the hook if a DAO gets sued,” in The Business of Business where he discusses decentralized autonomous organizations (DAOs) and the lingering question of who is held accountable if something goes wrong.

DAOs operate as collectives on blockchain technology with no real hierarchy and where traditional employer administrative functions are all done by computer, so it's unclear who inside the DAO is responsible if legal action is brought against the organization.

“Because they’re decentralized, all the proposals and decisions are made by the members, who may or may not be considered partners in the traditional legal sense,” said Lee. He continues, “Typically, if you got a judgment against a company you could notify their bank, freeze their accounts and assets. But most DAOs have assets in crypto wallets, or on exchanges and not in a centralized banking institution, which would be antithetical to the whole concept.”