1inch DAO Makes DeFi History, Votes To Onboard Legal Counsel
January 10 2024 - 2:00PM
NEWSBTC
In a historic move that sets a precedent for decentralized
autonomous organizations (DAOs), 1inch DAO, the entity behind the
1inch Network, has voted to secure “legal advisory services” from
STORM Partners. Notably, this decision comes amid growing
regulatory scrutiny on the crypto and decentralized finance (DeFi)
sectors. 1inch DAO Votes To Onboard STORM Partners For Legal
Advisory Services Following voting that ended on January
9–overwhelmingly supported by the 1inch community–holders decided
to onboard STORM Partners. This marks a significant step forward in
the DAO’s efforts to navigate the complex legal landscape and
protect its members. With STORM Partners on board, 1inch DAO
becomes the first autonomous organization in the broader crypto
ecosystem to access expert guidance on compliance, governance, and
legal defense. Out of this landmark move, the DAO will receive
expert legal advice. As such, they will strive to operate within
the confines of applicable laws and regulations in the United
States and beyond. Related Reading: Bitcoin Spot ETF: SEC
Mishap Triggers $220 Million In Crypto Liquidations This move is
particularly noteworthy given the recent United States Securities
and Exchange Commission (SEC) concerns over the crypto industry and
the DeFi sector. From lawsuits, the agency noted that individuals
who engage in illegal activities, including offering unregistered
securities, via a DAO could be sued individually. To illustrate,
following a lawsuit from the SEC, BarnBridge DAO agreed to
stop selling what the agency said were “unregistered securities.”
As part of the settlement, the DAO and its two founders, Tyler Ward
and Troy Murray, agreed to pay $1.7 million in damages. Lawsuits
Have Devastated DAOs In The Past By onboarding legal counsel, 1inch
DAO proactively addresses these concerns. It also aims to protect
community members against the bruises of the law. The DAO said the
decision was a “deliberate effort to balance preserving
decentralization and addressing operational challenges.” Through
STORM Partners, the DAO will have a framework and receive legal
support, laying a path for others to follow. Related Reading: Shiba
Inu Whale Accumulates Massive Holdings, Amid Price Recovery This
decision considers the adverse impact of a lawsuit from a
government agency like the SEC. In June 2023, US District Judge
William H. Orrick ruled in favor of the US Commodity Futures
Trading Commission (CFTC), agreeing that Ooki DAO issued
unregistered commodities. In a statement, the 1inchDAO new legal
partner, STORM, stated the following, hinting at the services and
the way they will attempt to protect the entity: Our team will
cover, among others, cross-jurisdiction regulatory compliance,
contractual agreements, DAO governance framework, members’
liability, legal personality, asset protection, intellectual
property, enforcement of rights and defence against external
claims. Our legal representation, underpinned by community-guided
Power of Attorney, is meant to ensure the DAO’s stability,
efficiency and longevity. Furthermore, by onboarding a legal
advisor, the community aims to protect the DAO’s decentralization
while maintaining “regulatory compliance.” It remains to be seen if
other DAOs will follow suit and vote to elect a legal
representative for their communities. Feature image from Canva,
chart from TradingView
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