The Most Popular Entities and Countries for DAO Registration

Decentralized autonomous organizations (DAOs) have evolved significantly since their inception, becoming integral to different sectors like DeFi, GameFi, DeSci in 2025. From community-driven projects to service-oriented platforms and investment vehicles, DAOs now encompass a wide range of purposes and structures all underpinned with the same feature of enabling increased participation and ownership. This evolution has led to varying needs and requirements for legal setups, as different types of DAOs face unique challenges in governance, liability, and regulatory compliance.

As DAOs continue to reshape industries and challenge traditional organizational models, the question of legal structuring has become paramount, especially after the first legal cases against DAOs. Whether a DAO requires a full legal wrapper, a partial solution, or no formal structure at all depends on its specific goals, operations, and the regulatory landscape it navigates.

This article explores the most popular entities and jurisdictions for DAOs in 2025, examining why legal wrappers are necessary and what benefits they provide to these decentralized organizations.

Why do DAOs need legal wrappers?

Let’s start with the most important question that comes before ‘how’ or ‘where,’ why.

Properly structured and registered legal wrappers can be a crucial tool for DAOs and their stakeholders. A primary benefit of the legal wrapper for a DAO can be the provision of legal compliance and protection, reducing liability risks for members. DAO legal wrappers can also facilitate efficient management of off-chain operations, provide tax optimization opportunities, and expand market reach and credibility. Additionally, legal wrappers can enhance governance structures and enable seamless integration of on-chain and off-chain activities. Overall, legal wrappers allow DAOs to operate more effectively in both decentralized and traditional business environments, ensuring long-term viability and success.

Let’s explore some of these benefits in turn.

What liability protection does a good DAO legal wrapper provide?

Before looking at the list of possible protections available through DAO legal wrappers, it is important to remember that these protections may be compromised if the legal wrapper is not appropriate for the DAO or is not set up properly. With help from legal professionals, your legal wrapper may be able to protect against the following risks:

• Unlimited judicial liability. A legally wrapped DAO can shield its members from personal involvement in lawsuits against the organization. This protection could extend to both regulatory lawsuits (with consequences of fines or criminal liability) and investor lawsuits related to violation of rights or misconduct. Without this limited liability protection, incidences like CFTC vs. Ooki DAO can occur.
• Unlimited tax liability. Legal wrapper can prevent individual members from being held personally responsible for the organization’s tax obligations and can protect them from potential penalties.
• Unlimited financial liability. A wrapper can protect DAO members from having to pay fines or penalties out of their personal funds, particularly in cases of regulatory violations such as AML (anti-money laundering) non-compliance.
• General partnership liability. Properly structured DAOs can avoid being classified as general partnerships, which would otherwise expose members to joint liability for actions taken by other members. The case concerning Lido DAO is an example of the trouble that DAO members may face if viewed as a partnership.
• Personal asset protection. In general, DAOs can act in a similar way as some of their traditional entity counterparts (e.g., corporations and LLCs) by protecting the personal assets of their members from losses or debts incurred by the organization.

Ultimately, the DAO legal wrapper can help ensure the DAO becomes a separate legal personality, capable of entering into contracts, holding assets, and engaging in legal actions independently of its members. It's crucial to repeat that these protections are only available when a DAO is properly registered with the correct legal/corporate structure. Unregistered or improperly structured DAOs may leave their members exposed to various forms of unlimited liability.

What off-chain operations can a DAO handle through its legal wrapper?

A DAO with a legal wrapper can handle several important off-chain operations, including signing contracts, raising funds, and managing the Treasury.

As a separate legal entity, a DAO can enter into contracts with external parties, enabling partnerships and business relationships. It can also implement various off-chain fundraising strategies, such as issuing tokens through Initial DEX Offerings (IDOs), launching NFT collections, selling membership passes, organizing crowdfunding campaigns, and applying for grants.

The DAO also enables off-chain Treasury management, including fund allocation, grant issuance to ecosystem participants, and the management of liquidity pools and reserve funds. DAO legal wrappers allow the DAO to hold and protect intellectual property, such as trademarks and domain names, and own and manage fiat and real-world assets. The legal wrapper can also enable the DAO to open a bank account and have access to fiat payments. The DAO can also engage auditors and manage services, infrastructure, and subscriptions whilst working towards regulatory compliance.

Aside from legal protection and off-chain operations, what other benefits can DAO legal wrappers provide?

Investors and other traditional business players are more likely to engage with a DAO that has a properly structured legal wrapper than with a DAO that is lacking legal structuring or is “poorly wrapped.” Giving a DAO a formal legal identity allows it to expand into markets that require legal recognition for operation. As mentioned previously, legal wrappers can mitigate personal tax risks for DAO members and contributors; however, they can also help reduce the overall tax burden too.

A DAO legal wrapper can also play a key role in the governance of the DAO. Effective DAO legal structuring hinges on seamlessly integrating traditional corporate governance with on-chain voting procedures. This integration is crucial for ensuring that the legal wrapper recognizes DAO resolutions and token holders’ decisions, forming the foundation for proper governance and control mechanisms. The goal is to strike a delicate balance: granting the legal wrapper’s management sufficient authority for effective operations while keeping it subordinate to the DAO for significant decisions. This approach preserves the DAO's decentralized nature and ultimate control while enabling the legal wrapper to function within existing legal and regulatory frameworks. Achieving this balance is challenging but essential for the DAO’s effective management and compliance.

Do all DAOs need legal wrappers?

In truth, no. Not all DAOs need legal wrappers. Some DAOs that are highly decentralized—especially those that have very limited off-chain operations or a very small scope of activities and consequentially have reduced regulatory enforcement and tax risks—may not require a legal wrapper. DAOs that are very decentralized in nature and perform operations for a very short period pose less of a risk when operating without a legal wrapper. Other DAOs that consist of hobbyists—as opposed to employees and contractors receiving regular income from the DAO—may also be able to operate relatively safely* without a legal entity.

*Of course, there is always risk to be considered, so it is best to consult legal professionals to determine if your DAO is sufficiently decentralized and safe from harm by operating without a legal wrapper.

What different types of legal wrappers are available for DAOs?

There are various options for DAO legal wrappers, of which the most important that you should know about consist of the following six types:

1. No legal entity
2. “Siloed” legal entity
3. Full LLC wrapper
4. Ownerless Offshore Foundation
5. Special Purpose Trust
6. D/UNA Wrapper

Let’s take a look at each one and explore the different types of projects that might make use of these options and the jurisdictions where these legal wrappers are available.

👉 Learn more about the different wrapper types and their estimate costs

No legal entity

DAOs can operate without a formal legal entity, so this is the first option to consider. As discussed earlier, this route is only really suitable for highly decentralized DAOs. This is because that if the DAO is operating for profit, or if token holders have the power to vote to distribute the DAO treasury themselves, then a risk arises that the DAO might be viewed as a general partnership.

⚖️ Case law: can DAOs be considered partnerships?

Under California partnership law, yes, some DAOs may be considered as general partnerships. In December 2024, a California District Court issued orders regarding Samuels v. Lido DAO and Houghton v. Leshner, finding that certrain DAO tokenholders are operating as general partners under California partnership law. The court determined that Lido DAO operates under an implied partnership agreement, allowing token holders to become partners and participate in governance through voting. Large token holders who can meaningfully participate in the DAO's management are considered part of the partnership. This ruling affirms that DAOs are not immune from legal liability, and DAO investors may be considered general partners if they influence the DAO's development, present themselves as governance participants, and can meaningfully participate in governance.

An unwrapped DAO with no legal entity is best for highly decentralized DAOs that are made up of hobbyists, are operating for a very short period of time, or have a very limited scope of off-chain activities.

Partial legal wrapper or “siloed” entity

A “siloed” entity setup is where a DAO, its token holders, or its founders can form a specific legal entity to perform specific activities. These could be activities belonging to the DAO or the protocol, or the siloed entity could simply be brought into existence to hold assets.

Another way of describing a siloed entity DAO is calling it a partially-wrapped DAO, as essentially you are legally wrapping some bits of the DAO and leaving the larger organization unwrapped. This approach can be beneficial as it allows DAOs to isolate specific operations and liabilities within their framework and continue to maintain a decentralized nature across the wider organization.

Examples of siloed entities include associations, foundations, trusts, and companies limited by guarantee. We will explore trusts and foundations further on. Associations are membership-based organizations that offer flexibility with operations and governance. However, associations require members to undergo onboarding procedures, so this can make it impossible to admit all DAO members as association members purely based on their token holding.

A company limited by guarantee is a legal structure that can be particularly suitable for certain DAOs. This entity type can be structured as a non-profit without shareholders, where the board's fiduciary duties are aligned with the company's purposes rather than shareholder interests. It requires careful structuring to ensure that members have limited authority and no ownership or distribution rights. This model allows DAOs to operate within a recognized legal framework while maintaining their non-profit status and decentralized nature, making it an attractive option for organizations focused on community or social objectives rather than financial gains.

A siloed entity for a partially wrapped DAO is best for DAOs that have activities that pose low regulatory risk, have a somewhat definable group of members, and perhaps require a specific legal entity to allow them to engage with a traditional service provider.

Partially wrapping a DAO can be a great approach when legal structuring is required for a specific activity or subgroup of the DAO. For example, an individual token holder may choose to form a legal entity to protect themselves from liability and tax burdens.

Jurisdictions and entity types for siloed entities include associations in Liechtenstein, Luxembourg, and Switzerland; companies limited by guarantee in Singapore, the British Virgin Islands (BVI), and Hong Kong.

See below for suggestions for foundations and trusts.

Full LLC wrapper

There are a few options for “fully wrapping” a DAO, the DAO’s token holders or the DAO’s founders, one of which is to use a LLC—a limited liability company—as the full legal wrapper. Once formed, the DAO members become the owners of the LLC. This process is much simpler compared to the process required within traditional LLCs, whereby each member must undergo onboarding, including KYC (know your customer) checks. A DAO LLC can simply admit any person holding a DAO governance token as a member, consequently granting those token holders direct government rights and limited liability.

A full LLC DAO wrapper is best for DAOs that can clearly define their members, who will often be few in number and considered a stable group (for example, investment DAOs). The token holders or subgroup within the DAO can use the LLC to protect them from liability and tax obligations.

Examples include: Metacartel Ventures, LAO/Flamingo, Syndicate and Pyth Network.

Jurisdictions for DAO LLC wrappers include Marshall Islands, Wyoming (USA), Utah (USA).

Ownerless offshore foundation

This is a partial wrapper option, whereby the DAO, its token holders, or founders establish an ownerless entity by way of a foundation. This orphan legal entity doesn’t have any shareholders and is created for specific purposes. The foundation combines features of both corporations and trusts and can outlive core contributors and founders as long as it always has objectives and finances to pursue those objectives.

The DAO ownerless foundation option is best for DAOs that want more efficient decision-making on certain matters while maintaining the DAO's decentralized ethos and ensuring accountability to the broader community. This option would mean a board or council is established with limited authority who would oversee assets transferred from the DAO’s community treasury, such as tokens, IP, and other resources. As the board or council must operate under strict fiduciary obligations, this ensures their actions are for the sole benefit of the DAO community and the DAO. Usually, the primary object will be to promote the protocol’s growth and development.

Jurisdictions for DAO ownerless offshore foundations include Cayman Islands, Cook Islands, Liechtenstein, Nevis, Panama, Seychelles, and Switzerland.

Examples include, ENS, Nouns, API3 - Cayman; Ethereum Foundation - Switzerland; SushiSwap - Panama & Cayman Islands.

Special Purpose Trust

This type of entity can be formed by transferring assets, like IP rights and possibly even tokens, to specific trustees in order for those assets to be used for a specific purpose in relation to the DAO. This is essentially a contractual arrangement for managing identified property that is attributable to the DAO. There is not always necessarily a legal entity that is formed when DAOs choose a special purpose trust as their partial legal wrapper.

The special purpose trust for DAOs is best used for DAOs that wish to delegate limited authority over specific assets to trustees to act in the interests of the special purpose.

Jurisdictions for special purpose trusts include Guernsey and the Cayman Islands.

Examples include: dYdX, Dash.

D/UNA wrapper

This relatively new option is for DAOs with US-centric members or activities. The main differences between a DUNA (Decentralized Unincorporated Nonprofit Association) and a UNA (Unincorporated Nonprofit Association) are that the DUNA is specifically designed for decentralized organizations and blockchain networks, while the UNA is a more general structure not tailored to these use cases.

Traditionally, a nonprofit DAO working towards a nonprofit goal, which is defined differently by US states, could form an UNA. Now, those DAOs can form a DUNA in Wyoming. The DUNA gives greater regulatory clarity and tax certainty.

The DUNA is best for DAOs that are heavily US-centric, with bona fide nonprofit purposes or goals, and that are willing to comply with KYC and tax reporting obligations and pay US corporation tax.

The only jurisdiction for DUNA set up is in Wyoming, USA.

Current examples of UNAs include Idle DAO (UNA) and LexDAO (UNA)

Nouns DAO is currently exploring using the Wyoming DUNA as a legal wrapper.

DAO-Specific Entity (DSE)

A DAO-Specific Entity (DSE) is a novel legal structure designed to seamlessly integrate with decentralized autonomous organizations. As a nonprofit or not-for-profit entity, a DSE automatically recognizes all token holders as members based solely on their token holdings, without requiring KYC or doxxing (except for UBOs). This “full wrapper” approach effectively merges the DAO with the legal entity, providing a legally secure perimeter for the community and governance. DSEs offer default limited liability to all members and enable effective legal, tax, and financial risk management.

DSEs are best for DAOs seeking comprehensive legal recognition and protection while maintaining their decentralized nature. They are particularly suitable for organizations that want to provide limited liability to all token holders, seamlessly integrate on-chain governance with legal structures, and manage regulatory compliance without compromising decentralization.

DSEs can be set up in several jurisdictions and entity types, including Marshall Islands DAO LLC, Wyoming DUNA, Ras Al-Khaimah DAO Association (UAE), and ADGM DLT Foundation (UAE).

Examples include a IOTA DLT Foundation, MetaDAO (Marshall Islands).

What to consider when choosing a country and creating a DAO legal wrapper

Ask yourself the following questions to help you cover all the different factors for your DAO legal wrapper and pick the best option for you.

Is your DAO for-profit or non-profit?

If your DAO is for-profit, meaning that members of the DAO can receive distributions and the DAO must pay taxes, there are lots of entity types and jurisdictions to explore. For non-profit DAOs, where organizations do not distribute profits amongst members, options can be more limited. The UNA, DUNA, and, in some cases, companies that are limited by guarantee are worth considering. Remember that your DAO can have multiple different wrappers to reflect aspects that are for-profit and not-for-profit.

What are your token issuance plans and history?

Tokens can come with lots of regulatory risk, much of which we explain and problem-solve in our guide on how to build a legal strategy for your token project. If you plan to issue tokens, you will need to consider things like registering a Token SPV (special purpose vehicle) and exploring jurisdictions with established VASP regimes so that your token issuance has the right regulatory authorization in place.

If it is the DAO that controls the initial token minting and that will own and manage the treasury of tokens thereafter, a token foundation might be the best option to allow partial distribution of tokens in the future. In recent years, the Cayman Islands foundation company has become increasingly popular amongst Web3 projects for token issuance, including for initial coin offerings (ICOs), security token offerings (STOs), or other types of token sales.

If deploying a native token—which is usually classified as a utility token—then there are plenty of jurisdictions that offer relatively straightforward, quick, and transparent regulatory journeys for token issuance, including Dubai, Gibraltar, Malta, Singapore, and Switzerland. Offshore financial centers in Cayman, BVI, or Panama can provide good options as well.

Alternatively, the relatively new DLT foundation from the ADGM or the DAO association offered by the RAK Digital Assets Oasis in Ras Al Khaimah, both of which are in the UAE, could be good options. They both permit token issuance; however, be wary of the strict regulatory requirements that apply. Lastly, you might find that a Marshall Islands DAO LLC or Wyoming DAO LLC is a better route for your token issuance plans.

To discover the best course of action for legally wrapping your token issuance, speak to a member of the Legal Nodes team today.

How does your DAO legal wrapper impact your governance model?

The governance model of your DAO plays a critical role, and how your governance is perceived can impact whether certain stakeholders are viewed as in control of the DAO and therefore subject to legal and other types of liability. The wrong DAO legal wrapper could upset your governance model, whereas the right wrapper can protect it, reinforcing the decentralized nature of your DAO and ensuring the ultimate governance power remains within the DAO.

The two main governance models to consider are member-managed DAOs and algorithmically managed DAOs. In member-managed DAOs, governance is exercised by members through voting mechanisms, with the help of smart contracts and other platforms to facilitate voting processes. This ensures that all decisions reflect the collective will of the members. In contrast, algorithmically-managed DAOs have pre-set rules managed solely by smart contracts. The can greatly reduce any requirement for human interaction or intervention with the DAO’s governance. Subsequently, members typically don’t exercise any governance powers via a voting process.

Regardless of the model chosen, the key consideration is integrating the DAO’s on-chain governance with the legal wrapper’s corporate management procedures. This integration should ensure the legal wrapper recognizes DAO resolutions and token holders’ on-chain voting, balance the authority of the legal wrapper’s management with the DAO's decision-making power, and maintain the DAO’s ultimate control over significant matters while allowing the legal wrapper to operate effectively within legal frameworks. By carefully designing this governance structure, you can preserve the DAO’s decentralized nature while gaining the benefits of legal recognition and protection.

What founder protection should you consider?

What partial or full legal wrappers might you need to take to protect your founders and any other stakeholders, like members of the DAO community? Remember, DAOs without a legal wrapper can expose members to all sorts of liabilities. An LLC can potentially shield members from limited liability, and in general, any partial wrappers such as DUNA, UNA, ownerless offshore foundations, and special purpose trusts can provide some degree of limited protection for founders, typically only in relation to the activities that the entity is built to wrap. So for example, with a foundation, founders may become protected from liability arising from the foundation’s activities after it has been established, but founders are likely not exempt from liability that arises from any other activities that fall outside the remit of the foundation or that the founders themselves cause the foundation to undertake.

Is it best to set up multiple legal wrappers (multiple entities) to serve different functions?

Yes. In fact, in many cases, it may be more practical for DAOs to have multiple legal wrappers in place. If you need to legally wrap your protocol upgradability, your Treasury management, and your front-end operations, it may be best to set up specific entities to handle each task. Together, they can provide a robust legal wrapper for your DAO. Multi-layered legal wrappers for DAOs and other Web3 projects are becoming increasingly necessary, as explored in depth in our utility token launch guide.

What stage is your project at, and what are your future plans?

It’s important to take a step back and look at the larger journey for your DAO and your Web3 project. If you’ve already figured out what you’re building, you’ll need to decide the state of your project’s decentralization and functionality. Then, you’ll need to think about the long-term strategy in terms of both ownership and governance.

If you’re still assessing your options, you may find the following guides helpful:

• Decide if you’re building a DLT, protocol, or dApp and consider the legal ramifications and routes of each project type.
• Dive into our legal strategizing playbook for Web3 builders to get a helpful overview of all the legal steps you could take in your journey.

What other obligations come with legal wrappers for DAOs?

Legal wrappers for DAOs, like other corporate entities, must adhere to specific legal and regulatory requirements based on their jurisdiction. One obligation that is not to be overlooked is the reporting of ultimate beneficial owners (UBOs). While definitions vary, UBOs generally encompass individuals holding significant voting power (typically 10-25% or more) or exerting control through alternative means.

DAOs are tasked with identifying and disclosing UBOs to registered agents and, in some instances, governmental bodies. Even if no controlling individual can be identified, at least one UBO must be reported, so a manager (such as a director, supervisor, or protector) may take up this role. UBOs are required to reveal their identity and undergo KYC procedures.

This requirement poses a unique challenge for DAOs and Web3 organizations, where key contributors often value anonymity to reduce legal exposure. Specialized services are now available to undertake DAO wrapper management, which some DAOs may prefer as it allows them to maintain their anonymity while ensuring their legal wrapper is compliant with UBO reporting rules.

Partial vs full legal wrapper options

Partial wrappers only legally wrap some parts of the DAO, such as specific siloed activities or functions, whereas full wrappers form a legal entity for use by the entire DAO.

DAOs with partial legal wrappers will co-exist with each wrapper legally; however, the DAO will remain on-chain, and members of the DAO will not become a part of the general legal wrapping that the DAO is now subject to.

Examples of partial legal wrappers include ownerless foundations, associations, trusts, and companies limited by guarantee.

In contrast, a full DAO legal wrapper is designed to provide legal structuring for the entire DAO, including its members (such as the token holders) and certain property and activities.

Usually, smart contracts are incorporated into their governance to keep the member registry on-chain, in lieu of having officers and directors. All DAO members are recognized as members of the legal wrapper, usually based purely on their token holding status. As soon as an individual becomes a token holder, they automatically become subject to the legal wrapper without having to pass through any KYC checks.

Examples of full wrappers include DAO LLCs, DLT foundations, the DUNA, and the DAO Association.

What legal wrapper is needed for token issuance and DAOs in DeFi projects?

Very rarely will one entity ever succeed in providing an effective legal wrapper for token issuance and DAO structures in DeFi projects. Instead, multiple entities are required, along with a journey of progressive decentralization for the project. The approach typically involves establishing the following entities:

1. Development company (DevCo), which is responsible for the initial project development and technical implementation.
2. Token issuance company, which handles the creation and distribution of tokens, especially for application-level tokens.
3. Foundation, which oversees the long-term project governance and community management.

Popular examples of multi-entity legal wrappers for this use case include the Cayman Foundation-BVI company, the Panama Triangle, and the Swiss Foundation + token issuer option.

Cayman Foundation with BVI Token Issuer

This structure uses the Cayman Islands’ foundation-friendly environment for governance and the British Virgin Islands’ streamlined process for token issuance.

“Panama Triangle”

This structure uses three different entities, all of which are registered in Panama, and each managing one of the three layers of the Web3 project (protocol layer, economic layer, and interface layer).

• The TokenCo or Token SPV (a Panama Corporation) handles token creation and distribution.
• The foundation (a Panama Private Interest Foundation) manages the project’s Treasury and governs the protocol.
• The front-end operator (another Panama Corporation) oversees user interface and experience.

Learn more about the Panama triangle in our guide on issuing tokens and setting up DAOs in Panama.

Swiss Foundation with Token Issuer

This last option combines Switzerland’s crypto-friendly regulations with a separate entity for token issuance. Explore our guide on how to use a Swiss Foundation as a DAO legal wrapper.

There are plenty of examples of these multi-entity setups for token issuance and DAO structuring. Uniswap uses a Delaware-based foundation for governance and a separate entity for token issuance; Aave has a Cayman Islands foundation for governance; and MakerDAO uses a Swiss foundation structure for overall project management.

Legal cases involving DAOs

The following cases serve as a reminder of how vulnerable DAOs and their members can be if operating without the proper legal structures in place.

The Sarcuni v. bZx DAO case

The Sarcuni v. bZx DAO case, decided in March 2023, involved a class action lawsuit filed by 19 bZx Protocol users who collectively lost $1.7 million in a phishing attack that emptied the DAO’s treasury of $55 million. The plaintiffs said that bZx DAO and its token holders were negligent in maintaining security protocols. In a significant ruling, the Southern District of California court denied the defendants’ motion to dismiss, finding that bZx DAO could plausibly be considered a general partnership under California law. The judge determined that BZRX token holders could be treated as general partners, potentially exposing them to joint and several liability for the DAO’s actions. While this case didn’t result in direct fines, it set something of a precedent for potential DAO member liability.

The CFTC v. Ooki DAO case

This case, which concluded in June 2023, saw the CFTC charging Ooki DAO with operating an illegal trading platform and acting as an unregistered futures commission merchant. The Northern District of California court granted a default judgment against Ooki DAO, ruling that it could be held liable as an unincorporated association under the Commodity Exchange Act. Ooki DAO had violated the CEA by engaging in unlawful off-exchange leveraged and margined retail commodity transactions, failing to register as a futures commission merchant, and not implementing required customer identification and anti-money laundering programs. As a result, Ooki DAO was ordered to pay a civil monetary penalty of $643,542, permanently shut down its operations, and was subject to permanent trading and registration bans.

The Samuels v. Lido DAO case

Andrew Samuels sued Lido DAO and four of its major investors after losing money on LDO tokens purchased on the Gemini crypto exchange. Samuels alleged that Lido DAO violated the law by selling unregistered securities. The court ruled that Lido DAO could plausibly be considered a general partnership under California law, potentially exposing its members to liability. The court also found that Samuels adequately alleged three of the four investor defendants were general partners in Lido DAO. Importantly, the judge determined that Lido DAO’s liability could extend to secondary market transactions, even though Samuels didn't purchase tokens directly from Lido.

Mantra DAO case

The Mantra DAO case involved a dispute between Mantra DAO Inc. and RioDeFi Inc. who claimed that former employees and DAO Council members conceived and developed the project and therefore had ownership, management, and control of it. The defendants argued that it was governed as a DAO through token ownership and smart contracts. The judge required all financial records be disclosed from January 2021 onwards and provided an interim ruling that didn’t determine who (or what) had final ownership of the project but focused on the importance of financial transparency in projects. A trial date has not yet been set.

Use a legal wrapper to help safeguard your Web3 project in 2025

As we've explored, legal wrappers have become essential for most DAOs and Web3 projects in 2025. From providing liability protection and facilitating off-chain operations to offering tax optimization and enhancing credibility, these structures are crucial for navigating the complex legal landscape surrounding decentralized organizations. Whether opting for a partial wrapper, full LLC, ownerless offshore foundation, or a specialized entity like a DSE, the choice of legal structure can significantly impact a project's operations, compliance, and long-term success.

Recent legal cases have underscored the risks faced by unstructured DAOs, highlighting the importance of proper legal frameworks. As the Web3 space continues to evolve, choosing the right legal wrapper—considering factors like jurisdiction, token issuance, and specific project needs—is not just a legal necessity but a strategic advantage. Don't leave your project's future to chance; invest in a well-designed legal wrapper to protect your DAO and its members while enabling growth and innovation in the decentralized ecosystem.

How Legal Nodes can help you wrap your DAO

Are you looking to legally wrap your DAO or figure out the legal strategy for your Web3 project? Legal Nodes can help guide you through the complexities of legal structuring and compliance. We’ve worked with over 300 Web3 projects, so we understand the unique challenges faced by Web3 builders and DAO founders today. For example, recently we've helped a web3 gaming project with a token issuance support.

Our specialist team of Web3 legal brains can help you to:

• Define your decentralization, ownership, and governance goals
• Identify and mitigate potential legal risks around regulatory compliance
• Select the optimal jurisdiction(s) and legal entities for your needs
• Design a tailored multi-entity structure based on current best practices and successful case studies
• Navigate the registration process, including setting up bank accounts and working with agents and other organizations
• Ensure ongoing compliance with local laws and regulations

Whether you're looking for a fully wrapped DAO or a long-term legal strategy to achieve decentralization, we can help you find the very best legal solutions and get your legal tasks moving. Contact Legal Nodes today to get started.