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What Legal and Regulatory Challenges Do DAOs Face That Traditional Corporations Do Not?

DAOs struggle with unclear legal status, member liability, regulatory jurisdiction, and interfacing with traditional financial systems.
Greeks.Live04.11.25

What Legal and Regulatory Challenges Do DAOs Face That Traditional Corporations Do Not?

DAOs face significant legal ambiguity because they often lack a clear legal status. This raises questions about who is liable for the DAO's actions ▴ is it the developers, the token holders, or no one?

They also face challenges in interfacing with the traditional financial system, such as opening bank accounts or signing contracts. Furthermore, the decentralized nature of DAOs makes it difficult for regulators to determine jurisdiction, leading to uncertainty regarding securities laws, taxation, and anti-money laundering (AML) compliance across different countries.

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