How Do Decentralized Autonomous Organizations (DAOs) Manage Regulatory Risk?

DAOs face unique challenges as they often lack a central legal entity, making it unclear who is responsible for regulatory compliance. They typically manage risk by attempting to decentralize governance and operations to the maximum extent possible.

Some DAOs use legal wrappers or foundations in favorable jurisdictions, while others rely on code-is-law principles, which are increasingly scrutinized by regulators globally.