DAO Formation & Governance

Dilendorf Law Firm advises clients on all aspects of formation, governance and operation of Wyoming decentralized autonomous organization (DAO) limited liability companies (LLCs). From drafting airtight Articles of Organization to ensuring compliance with Wyoming and federal law, our attorneys are well-versed in the legal and practical issues that arise in the context of planning and structuring LLCs. Dilendorf aims to develop and maintain relationships with each of our clients, enabling us to gain a deep understanding of their goals and priorities.  

Benefits of forming a Wyoming DAO LLC include:

• Limiting personal liability of LLC members/owners;
• Avoiding double taxation and utilizing the 20% pass-through deduction established under the Tax Cuts and;
• Less administrative hassles and paperwork;
• Simplified digital management of significant number of investors via smart contracts;
• Automated and transparent governance, voting, and compliance using smart contracts;

Our attorneys provide comprehensive services throughout the formation of the DAO LLC and beyond, including:

• Determining whether a DAO LLC is the appropriate structure;
• Conducting a comprehensive analysis to determine whether the membership interest is a security under US law;
• Drafting the Articles of Organization and operating agreement;
• Developing the DAO’s strategy and management;
• Advising on foreign and US investor qualifications;
• Structuring the DAO to qualify for an exemption from registration as a security under Regulation D and Regulation S;

Wyoming’s DAO LLC Chapter is a major development in the corporate world, as it clarifies the status of a DAO as a legal entity and provides structure, clarity, and legitimacy to many DAO projects. Our attorneys will use a combination of preparation, expertise, and care to best serve the needs of our clients and help them efficiently navigate the web of challenges arising throughout formation, governance and operation of DAO LLCs.

Resources:

• SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities
• Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO
• Blockchain, Smart Contracts & DAO
• Law and the Blockchain
• The Data Briefing: I, For One, Welcome Our New Chatbot Blockchain Digital Autonomous Organizations
• Decentralization, DeFi and MarketDAO
• Cryptocurrency Enforcement Framework
• U.S. Dept. of the Treasury, Fin. Crimes Enf’t Network, What is the BSA Data?
• FinCEN Guidance FIN- 2019-G001, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies
• CFTC Staff Issues Advisory for Virtual Currency Products
• Lael Brainard, Fed. Reserve Governor, “An Update on Digital Currencies”
• DoD Digital Modernization Strategy
• The FATF Recommendations: International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation
• FATF REPORT – Virtual Currencies Key Definitions and Potential AML/CFT Risks
• FBI Expects a Rise in Scams Involving Cryptocurrency Related to the COVID-19 Pandemic
• I.R.S. Notice 2014-21
• Operator Of Bitcoin Investment Platform Pleads Guilty To Securities Fraud And Obstruction Of Justice
• TREASURY ORDER 180-01. Financial Crimes Enforcement Network
• FinCEN Issues Guidance on Virtual Currencies and Regulatory Responsibilities
• Ripple Labs Inc. Resolves Criminal Investigation
• Office of Foreign Assets Control – Sanctions Programs and Information
• Treasury Sanctions Individuals Laundering Cryptocurrency for Lazarus Group
• OCC Interpretative Letter #1170, Authority of a National Bank to Provide Cryptocurrency Custody Services for Customers
• U.S. Dept. of the Treasury, Fin. Crimes Enf’t Network, FinCEN Advisory FIN-2012-A001: Foreign-Located Money Services Businesses