Broadly classifying everything as a general partnership is not going to happen. Number one, there are already states such as Wyoming that have laws on the books allowing you to register a DAO as a DAO LLC. Number two, much of crypto is international and lawsuit will have no jurisdiction there.
This is simply not true. US has very long arms when it comes to fraud or violations. If it's consumers are harmed, they might seek criminal charges even.
Fraud is criminal activity, I'm not talking about that. Corporate shield does not protect you from criminal law. Do Kwon probably should do jail time. The comment I was referring to had to do with a civil lawsuit.
I don't think they knew they were putting money in a Ponzi scheme. They thought the gains were coming from real investments.
People who spent money on Terra/Luna knew it was a cryptocurrency that used magic computer maths to make numbers get bigger (until number got small), same as all the other cryptocurrencies.
That's a ponzi too, and no, your ordinary American only looked at the large yield and said oh, i should get in on that, even though, it was some sort of ponzi with funny dynamics.
So no, it's still a ponzi, and no, most people had no idea.
Precisely. If the US doesn't have juristiction they will just seek extradition and generally get it unless they fuck up the case horribly (like the Kim Dotcom situation).
Depends on the country. Some countries do not extradite their citizens and some others only if what they are accused of is also illegal in their own jurisdiction...
Everything. They couldn't for the life of them work out how to follow procedure so they got crucified by the NZ courts.
If they had just done shit by the book they would have had him on US soil with no problems at all.
FWIW I don't agree that he -should- be able to be extradited. Just stating the fact that if the US had just not screwed the pooch they would have been successful in doing so.
And how are they going to enforce it or serve it? At any rate, no, there is no way that any online organized group of people (dao is a loosely defined word, except where legally defined and protected as in Wyoming) will be determined to be legally and universally and internationally jointly and severally liable.
That's not to say that some suits won't be brought but even if bzx lost their case it would not be necessarily a reflection on other legal or political arrangements.
> And how are they going to enforce it or serve it?
Have you, uh, met America?
Not only is America litigious, the long arm, when sufficiently motivated, will get you anywhere on the face of the planet. Just ask Assange. Not that I support this behavior, or this privilege, but I'm not ostrich enough to pretend it's not on the table.
> dao is a loosely defined word, except where legally defined and protected as in Wyoming
That may matter in Wyoming, but in America, I assure you, the 'ill defined' nature won't stop the prosecutors.
I mostly agree, but one place people can escape to is Moscow, where Edward Snowden has relocated to. Of course, Russia has become less attractive recently.
I'm not a huge fan of Snowden's; I'm not sure what to think of him. It's tempting to mock him for ending up in Russia of all places - one of the top 3 countries for suppressing dissent. But he didn't go there because he thinks the Russian government is morally superior; he went there because it allows him to stay of out prison.
I don't think he dedicated his life to denouncing all morally questionable government actions everywhere. He ruined his own life by denouncing what the NSA was allegedly doing back then. I'm not sure I can demand that he should ruin his life even more by annoying the Russian government.
Indeed although one could argue that exile in Russia in and of itself is punishment. Especially since thanks to the long arm of Uncle Sam, you won’t be boarding an international flight any time soon - lest you find it diverted to Cuba.
It seems that if they wanted to, the Russians could make him fake passport with Snowden's picture and a made-up name and he could go wherever he wants. He shows up in the passenger manifest with some random name and the plane doesn't get diverted.
But he probably doesn't get any favors from Russia because he's not useful to them.
I suspect Putin would hand someone over from Russia for the right price; Snowden currently provides more value to Russia by annoying the US than he would handed over.
> (dao is a loosely defined word, except where legally defined and protected as in Wyoming)
Looking very closely at the link you give in another document, you have to specifically go through a registration process to register as a DAO in Wyoming, and get the legal benefits of becoming a LLC.
> At any rate, no, there is no way that any online organized group of people will be determined to be legally and universally and internationally jointly and severally liable.
That's not how the law works. If you've got (a) two or more people that (b) agree to do something in partnership [it does not need to even be a written agreement], then by default, you have created a general partnership. An "online organized group of people" is--you guessed it--a group of two or more people that agreed to do something in partnership, so you've got a general partnership, unless someone has a quantum of legal knowledge and takes steps to form any kind of legal governance other than a general partnership. And you've got any legal knowledge, you'll avoid a general partnership, because that means every partner is jointly and severally liable.
Sure, you can override this if you take the proper legal steps. But given how much the crypto community seems to spend trying to claim the law doesn't apply to them (e.g., code is law), I'm skeptical that very many DAOs have taken the appropriate legal steps to avoid forming a general partnership.
>> there is no way that any online organized group of people (dao is a loosely defined word, except where legally defined and protected as in Wyoming) will be determined to be legally and universally and internationally jointly and severally liable.
That's an assertion that may be tested when there are tens or hundred of millions of dollars at stake. In our everyday lives how you would go after something like a DAO is not at all obvious. But that doesn't mean there are ways.
And you are right to say it will be a reflection of other legal and political arrangements.
Why not? Not a lawyer but isn't it fairly normal in criminal law, for example, with a terrorist or criminal organization (and a fair amount of international cooperation there, too)? To be clear not saying DAOs etc. are in any way falling in that area (criminals aside), but why would the method of organization provide a shield unless created by law (such as an LLC)?
As I mentioned above, there are already laws on the books in the United States explicitly protecting DAOs from personal liability when they are registered as a DAO: https://sos.wyo.gov/Business/Docs/DAOs_FAQs.pdf
So there's already an exception to disprove this "universal, international, jointly and severally liable" theory that is going on in this thread. OP was mentioning A16z and the like as if they are not shielded from personal liability for lawsuits targeting the companies they invest in. That's not to say that a16z cannot be sued. But the individual investors that are part of it, that participate in rounds, being sued on a personal level as if they are "jointly and severally liable partners", that is not going to happen. Sorry. Even if Bzx loses their case, the facts of the case are material. The facts of each unique situation matter. Even within the United States.
Just as a thought experiment: if a DAO was created by 7 random people on the internet from Dubai, Latvia, Colombia, Australia, Singapore, Switzerland, and Taiwan, how exactly would you go about bringing a lawsuit against them from the United States? And how would you target them on a "jointly and severally liable" basis?
> Just as a thought experiment: if a DAO was created by 7 random people on the internet from Dubai, Latvia, Colombia, Australia, Singapore, Switzerland, and Taiwan, how exactly would you go about bringing a lawsuit against them from the United States? And how would you target them on a "jointly and severally liable" basis?
Sue the Australian in the Australian court--common law jurisdiction, so it's going to be quite similar to US laws, and personal jurisdiction over them in Australia isn't going to be hard to establish. I get the judgement against them for the full amount, and it's their problem to get the other 6 people to pony up their share. That's what "jointly and severally liable" means: I only need to go after one person for any claims I have; it's their problem to get the pain distributed.
> are already laws on the books in the United States explicitly protecting DAOs from personal liability when they are registered as a DAO
Isn't this only relevant when ash organization takes the legal steps to register as a DAO in Wyoming? If that is not the explicit corporate governance model, then a default structure is assumed.
Analogously, my state (Virginia) has laws on the books limiting my personal liability for judgments against my business iff I register that business as an LLC. If I don't do so, then the business is considered a sole proprietorship, and I can be sued personally for harms my business causes.
Thanks for the explanation. As I said, not a lawyer/not very familiar with US domestic law.
For your thought experiment: maybe try to use something from the CFT spectrum, because that you can make stick with a lot of places in some form or another? So not really simple civil law and probably not straight forward (could it even work?)
