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1inch DAO Makes DeFi History, Votes To Onboard Legal Counsel

In a groundbreaking development that establishes a model for decentralized autonomous organizations (DAOs), the 1inch DAO, which operates the 1inch Network, has approved a proposal to obtain “legal advisory services” from STORM Partners. This significant decision takes place at a time when there is increasing regulatory oversight and scrutiny on the cryptocurrency and decentralized finance (DeFi) industries.

1inch DAO Votes To Onboard STORM Partners For Legal Advisory Services

Following a decisive vote that concluded on January 9 and received overwhelming support from the 1inch community, token holders have opted to bring STORM Partners into the fold. This decision represents a significant advancement in the DAO’s mission to navigate the intricate legal terrain and safeguard the interests of its members.

With STORM Partners now in the picture, 1inch DAO becomes the pioneer among autonomous organizations within the broader cryptocurrency sphere to access expert guidance in matters of compliance, governance, and legal protection. As a result of this groundbreaking move, the DAO will have the benefit of expert legal counsel.

Consequently, the objective is to operate within the boundaries of relevant laws and regulations, both in the United States and internationally.

Of particular note is the timing of this development, coming in the wake of heightened concerns from the United States Securities and Exchange Commission (SEC) regarding the cryptocurrency industry and the DeFi sector. The SEC has pointed out that individuals involved in illegal activities, such as offering unregistered securities through a DAO, may face individual lawsuits.

To illustrate the gravity of this situation, following a lawsuit filed by the SEC, BarnBridge DAO agreed to cease the sale of what the agency deemed “unregistered securities.” As part of the settlement, the DAO, along with its co-founders Tyler Ward and Troy Murray, consented to pay $1.7 million in damages.

Lawsuits Have Devastated DAOs In The Past

By bringing legal counsel on board, 1inch DAO is taking proactive measures to tackle these concerns head-on. This move serves a dual purpose, addressing the preservation of decentralization while also confronting operational challenges. Through its partnership with STORM Partners, the DAO will establish a structured framework and gain access to legal support, thereby paving the way for others to follow suit.

This decision takes into account the potential negative ramifications of facing 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), affirming that Ooki DAO had indeed issued unregistered commodities.

In an official statement, STORM, the new legal partner of 1inch DAO, outlined their commitment to providing comprehensive services and safeguarding the entity. They indicated their intent to address the following aspects:

1. Cross-jurisdiction regulatory compliance.
2. Drafting and managing contractual agreements.
3. Establishing a robust DAO governance framework.
4. Assessing members’ liability.
5. Exploring legal personality options.
6. Implementing asset protection measures.
7. Managing intellectual property matters.
8. Enforcing rights and defending against external claims.

STORM emphasized that their legal representation would be guided by the community’s input through a Power of Attorney mechanism, with the ultimate goal of ensuring the stability, efficiency, and longevity of the DAO.

Additionally, by enlisting the services of a legal advisor, the community aims to strike a balance between preserving the DAO’s decentralization and adhering to “regulatory compliance.” The adoption of this approach raises the question of whether other DAOs will follow suit and seek to appoint legal representatives for their respective communities.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

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