On the 22nd of Dec 2022, a Chinese reporter, Colin Wu, announced that the Republic of the Marshall Islands had legalized Decentralized Autonomous Organizations (DAO) and their tools.
In a world-first, the Republic of the Marshall Islands announced today that the government has passed into law the Decentralized Autonomous Organizations Act of 2022, which legally recognizes DAOs and enables legal entities to formally adopt DAO structures and governance tools.
— Wu Blockchain (@WuBlockchain) December 22, 2022
The revelation came when people sought increased regulation and monitoring of Blockchain projects and the crypto space. After the fall of FTX and the drama surrounding SBF, centralized crypto platforms have been facing increased attention from both users and financial institutions in the government.
This situation has led to increased acceptance of decentralized organizations. That’s why the Republic of the Marshall Islands released the DAO Act of 2022. The Marshall Islands’ administration acknowledges that a “one-size-fits-all” strategy will not work in the crypto sector. It also recognizes the benefits that accepting decentralization may bring to its economy.
According to the Finance Minister of the Marshall Islands, Bransen Wase, they are devoting courts and resources to the still-developing world of crypto. They recognize the unique role that DAOs can play in the blockchain space but also the broader economy.
The idea is to provide DAOs with an easy, fast, and cost-efficient manner of registration and a location for them to establish activities.
The DAO Act 2022 provides a registration process for DAOs, which will be managed by MIDAO, a local firm with the experience to attract and maintain the Marshall Islands’ legal system making it more conducive to DAO structures than other jurisdictions throughout the world.
MIDAO makes the process easier for DAOs by handling everything from establishing legal entities to providing a physical mailing address and submitting annual filings. MIDAO believes incorporation should be quick and straightforward so that DAOs and their contributors can concentrate on building. According to MIDAO, DAOs are the future of how humans organize themselves and resources in an egalitarian manner.
While the Republic of the Marshall Islands accepts DAO structures, the United States is cracking down on Ooki DAO.
Ooki DAO is a DeFi trading platform that allows non-custodial crypto margin trading. It was formerly bZeroX, a company that offers unregistered derivative products to US citizens. They came under investigation by the CFTC, and after settling with the agency, they chose to change to Ooki DAO.
In light of that, the CFTC choose to serve Ooki a lawsuit through its founders, Bean and Kistner, who are also token holders with the DAO. Yet, because Bean and Kistner have already settled with the CFTC and are no longer involved with the Ooki DAO, it’s argued that they aren’t legally allowed to sue the Ooki DAO.
