In an unprecedented move that sets a new standard for decentralized autonomous organizations (DAOs), 1inch DAO, the driving force behind the 1inch Network, has voted to procure “legal advisory services” from STORM Partners. This noteworthy decision comes at a time when the crypto and decentralized finance (DeFi) sectors are under increasing regulatory scrutiny.
A Historic Vote for Legal Support
On January 9, the 1inch community overwhelmingly voted in favor of bringing STORM Partners on board. This critical decision marks a significant leap in the DAO’s efforts to traverse the intricate legal terrain and safeguard its members. With STORM Partners now part of the team, 1inch DAO has become the first autonomous organization in the broader crypto ecosystem to secure expert advice on compliance, governance, and legal defense.
From this momentous decision, the DAO will gain expert legal counsel, enabling it to operate within the boundaries of applicable laws and regulations in the United States and beyond. This move is particularly significant in light of recent concerns expressed by the United States Securities and Exchange Commission (SEC) over the crypto industry and the DeFi sector.
Addressing Regulatory Concerns
The SEC has highlighted that individuals involved in illegal activities, including the offering of unregistered securities through a DAO, could face individual lawsuits. For instance, after facing a lawsuit from the SEC, BarnBridge DAO agreed to cease selling what the agency classified as “unregistered securities.” As part of the settlement, the DAO and its two founders agreed to pay $1.7 million in damages.
By securing legal counsel, 1inch DAO proactively addresses these concerns and aims to shield community members from legal repercussions. The DAO has described this decision as a “deliberate effort to balance preserving decentralization and addressing operational challenges.”
Setting a Precedent for DAOs
Through STORM Partners, the DAO will establish a framework and receive legal support, paving the way for others to follow. This move takes into account the potential negative impact of a lawsuit from a government agency like the SEC. In June 2023, US District Judge William H. Orrick sided with the US Commodity Futures Trading Commission (CFTC), agreeing that Ooki DAO issued unregistered commodities.
STORM, the new legal partner of 1inch DAO, has hinted at the services they will provide to protect the entity, covering areas such as cross-jurisdiction regulatory compliance, contractual agreements, DAO governance framework, members’ liability, legal personality, asset protection, intellectual property, enforcement of rights and defense against external claims.
It will be interesting to see if other DAOs will follow in the footsteps of 1inch DAO and vote to appoint a legal representative for their communities. As the crypto space continues to evolve, platforms like cryptoview.io are providing valuable tools for tracking and analyzing digital assets.
By engaging a legal advisor, the community aims to safeguard the DAO’s decentralization while ensuring “regulatory compliance.” This pioneering initiative by 1inch DAO in the realm of 1inch DAO legal advisory services marks a significant step towards a more secure and legally compliant future for DAOs in the crypto space.
