Crypto Regulation For DAOs

February 3, 2023

DAOs & Crypto Laws - The Legal Framework

If you want to know more about the hot issues in the crypto world, you really should check out Tilton Talks Crypto, the podcast featuring the Cofounder and CEO of SmartFi, Aaron Tilton. Recently, for example, Aaron and his co-host, Martin Tillier, SmartFi’s Head of Research, welcome Robert Lamb to show to discuss DAOs (Decentralized Autonomous Organizations). They talked about what they are, the existing legal framework around them, and how their status could be clarified and codified in future legislation.

Rob Lamb

Robert Lamb was the perfect guest to cover that subject. He is a partner in the Polsinelli Law Firm, an attorney with decades of experience in business law who has, over the last few years, become a specialist in DAO formation. He brings that expertise to the state’s Blockchain and Digital Innovation Task Force, a body on which Aaron also serves, that was set up to advise the governor and legislature of Utah on legislation that will provide the desired oversight of the crypto industry, while still allowing business in the crypto space to survive and thrive there.

Listen to the Episode

Regulation Vs Recognition

Rob, like Aaron, accepts that some kind of regulation of the industry is coming, but believes it should be done at the state level and with a light touch. He, like many in the industry, believes that the world of finance will be vastly improved by blockchain technology and a decentralized approach, but for it to fulfill its potential in the US, the crypto industry must avoid being caught up in the power battles of the various regulatory agencies in D.C.

An important part of that, Rob points out in the podcast, is to arrive at a clear definition of a DAO, a structure that is gaining in popularity among platforms and projects. There has already been a case where DAO members have been found jointly liable for a hack, bringing to light the fact that a big legal disadvantage of a DAO right now is that without a corporate identity, the individuals rather than the entity itself are subject to prosecution and liability should something go awry.

That, Rob maintains, is a problem that can be solved in a way that will benefit state governments as well as DAOs. Recognizing them as legitimate businesses would clear up the liability issue, but it would also allow states to tax them. Nobody wants to subject themselves to taxation, but in this case, Rob argued, it looks like the lesser of two evils.

Community Questions & Comments

During the livestream of episodes of Tilton Talks Crypto, the SmartFi community are encouraged to comment and ask questions, and the community input on this subject was particularly interesting. One question that provoked a particularly lively discussion was whether you can really be an autonomous organization if you are regulated in any way, something on which both Aaron and Rob weighed in.

If you want hear what they had to say on that a whole host of other subjects, you can download either the livestreamed video version of the episode from or the podcast from most major podcast providers, including Apple Podcasts, Google, Spotify, Podchaser, and Amazon, to name just a few.

Author: Martin Tillier
Martin has around forty years of market experience and, in addition to his role as Head of Research at SmartFi, is a daily contributor of market analysis and opinion to He first became interested in crypto 2014, when he started writing regularly on the subject. He is from England but now lives in Connecticut, USA with his wife, his dogs, and his three kids’ college tuition bills. 

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