How Do DAOs Fit into the Regulatory Framework for Financial Derivatives?

Decentralized Autonomous Organizations (DAOs) present a unique challenge to derivatives regulation because they lack a clear legal jurisdiction and centralized leadership. Regulators struggle to identify a responsible entity for compliance with rules concerning market manipulation, disclosure, and investor protection.

Some jurisdictions are attempting to classify DAOs as legal entities like corporations or trusts, but their decentralized nature often conflicts with traditional regulatory structures for financial intermediaries.