SNS DAO lawsuits and liability

I was reading Federal Court Holds DAO Members Can Be Treated as General Partners Subject to Joint and Several Liability

Has anything been done from a legal standpoint to shield members of the DAO from liabilities? I suspect any judgments would be distributed to members based on the weighted average of partnership. Not sure how any of this works.

These types of court cases where DAOs are being further defined by courts i believe warrant the SNS DAO to allow unlocking or reselling of neurons if members no longer wish to participate. I get the idea of locking a neuron for 8 years but perhaps not giving people a way out isn’t lucrative when courts further define the legal merit of a DAO and members are stuck.


It will be nice to add a method to delete neurons by users, especially for people like @zlk2000.
Regardless of its state, they could burn the tokens contained in it and remove the neuron from the registry. This would effectively free them from the potential risks to which they are exposed and would be useful to other participants due to its deflationary nature.

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We had an interesting discussion regarding the legal aspects of the SNS with a lawyer last week on our livestream.

In a nutshell, the likely party to be held liable is the SNS DAO Core Team that’s building the application. The neuron holders (unless extremely influential) should have plenty of legal shielding.


From a legal standpoint, DAOs are business entities and need to be registered as required by their respective law(s). The law doesn’t care much about how you run your business, it just wants to know who to blame in case things go wrong. And in a Dao, where all the token-holders/owners are all anonymous, if no one stands up- then everyone has stood up.
I find that so many DAOs are launched not for an idea, but for a token and easy funding from blockchain projects. And if the most important part of a DAO proposal is getting it submitted before the easy funding runs out, things like creating anything other than the simplest organizational structure are out the window. Wonder why they keep simultaneously screaming about how everything should be ‘democratic’, yet at the same time nothing is getting done? If a DAO really is a business, then running it ‘democratically’ is about the dumbest way possible. But, creating any other voting system is too hard for anyone looking for easy money.
This judgement doesn’t change anything for DAOs, it just gets a legal opinion ‘on the books’. The only person(s) who would get hit hard by this would be DAOs creators. General Partnership means that they are using their personal assets to cover the DAO’s liabilities.

In the future, anyone wanting to start a DAO is going to need to put at least enough effort into registering it as a LLC if they want to keep their house.

Dfinity would be the core DAO owner of the SNS I assume, correct? Why not have a proposal require them to register the DAO as an LLC?