The Liability of DAOs and Their Founders Has Been Put to the Test in Court

At the core of the case are how the concepts of fiduciary duty (the obligation to act in the best interest), the duty of care (the obligation to act without negligence), as well as joint and several liability (a responsibility that is shared by multiple parties), apply to the concept of a DAO and governance token holders. While existing case law has created plenty of guidance on how these concepts apply to TradFi partnership structures like General and Limited Partnerships, DAOs are something of an undiscovered country given their unique structure.