The Legit Ledger Episode 6: DAO Liability in Light of the bZx DAO Class Action with Yasamin Parsafar and Christopher Bosch
In this episode, Sheppard Mullin attorneys Yasamin Parsafar and Christopher Bosch discuss Decentralized Autonomous Organization (or DAO) liability considerations in light of Sarcuni et al v. bZx DAO, a class action lawsuit alleging negligence due to inadequate security measures resulting in the loss of more than $40 million in funds for token holders.
About Yasamin Parsafar
Yasamin Parsafar is a partner with the Intellectual Property Practice Group in Sheppard Mullin’s San Francisco office, where she serves as co-leader of the firm’s Blockchain & Fintech team. Her practice focuses on protecting her clients’ intellectual property rights through counseling, prosecution, enforcement, and litigation. Yasamin leverages her litigation experience to strengthen and protect her clients’ intellectual property, manage risks, and position businesses to succeed in the event of a dispute. She frequently advises and protects brands venturing into web3 on various issues related to non-fungible tokens, metaverses, games, online marketplaces, and other platforms.
About Christopher Bosch
Christopher Bosch is a Senior Associate with the Governmental Practice Group in Sheppard Mullin’s New York office. Christopher represents banks, broker-dealers, boards of directors, officers, and other professionals in connection with internal investigations and inquiries by government regulators, such as the Securities and Exchange Commission, Commodity Futures Trading Commission, and Department of Justice. He advises firms regarding digital asset regulatory compliance and has represented a blockchain investor in connection with shareholder derivative and class actions alleging securities law violations. Christopher also represents organizations and individuals in connection with a wide variety of corporate litigation.
What We Discussed In This Episode:
- What is a DAO?
- How are DAOs governed?
- Can a DAO be sued?
- Why is the bZx DAO class action important?
- Who are the plaintiffs in this case?
- Who are the defendants in this action?
- What is the theory on which plaintiffs seek to hold the defendants liable?
- Plaintiffs assert that DAOs are general partnerships. Why is that significant?
- What are the requirements for forming a general partnership?
- What is the Doctrine Joint and Several Liability as it pertains to a general partnership?
- What advice do you have for individuals seeking to create a DAO, bring in investors, or pitch it to potential users?
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This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs.