Question about DAO legal status

Does anyone know of any information regarding the legal issues surrounding a DAO? I am trying to understand how DAOs may be treated from a legal perspective by various entities such as governments, regulators, tax authorities, etc.

For example, if a DAO generates revenue (value in whatever form) how what are its obligations in terms of reporting, etc? Also, if someone were inclined to sue a DAO, what does that look like?

Any insight on this topic would be greatly appreciated.
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Comments

  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    edited May 2016
    @btchedge There's been a lot of talk about DAO's 'legal' status but the fact is because it's a completely new organisational technology, there is no regulatory framework which it fits in. IOW it doesn't constitute a legal entity, it is simply computer code, and in that is an application of the 'laws of physics' and therefore quite irrefutable.

    However, contractors which are legal entities will still need to report their dealings with the DAO according to their legal requirements which is a bit of a tangle when they can identify the legal entity from which they received or paid money to. To band-aide over this issue, Slock.it UG (the legal company who developed the code and will ask for funding) also started 'DAOLink' as another legal company that interfaces the DAO with the contractors at the legal level.

    As for suing, there was an article some weeks back speculating that the DAO might be viewed as an 'unassociated organization' with a legal structure eventually being imposed by the courts if the regulators don't work it out first. But it's better you read the article rather than me parrot on here...
  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    btchedge said:

    Does anyone know of any information regarding the legal issues surrounding a DAO?

    Please state teritorty. i.e. Does anyone know of any information regarding the legal issues surrounding a DAO in Russia? Japan? International waters? Space? Delabole?

  • BiodomBiodom Member Posts: 693 ✭✭✭
    @btchedge @o0ragman0o

    I am pretty sure many will try to fit a square peg (DAO) into a round hole.
    I see many such moments ensuing.
  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    btchedge said:

    Also, if someone were inclined to sue a DAO, what does that look like?

    Any insight on this topic would be greatly appreciated.

    Yes there would be trial. The court would be A.I. The jury would be Crowdjury
    http://crowdjury.org/ (A Judicial System for the Internet Era)
    Currently this technology has been effective in countries where corruption is endemic in government.

    @Biodom if the square peg represents the DAO, what is the round hole?
    Just because there are no laws yet, systems are still in-place to deal with A.I. crime and Crowd juries may be required to give a verdict. After all, its all about decentralization. Doesn't anyone watch the TV NEWS?

    Also, there is no Statute of limitation here in the UK or its dependencies. You can be tried retroactively, like 300 years after you die and your family can held accountable. It covers A.I.

    What i think is more interesting is if one DAO tries to sue another DAO? And in which teritory
  • BiodomBiodom Member Posts: 693 ✭✭✭
    edited May 2016
    @greenuser
    greenuser said:


    What i think is more interesting is if one DAO tries to sue another DAO? And in which teritory

    In this galactic quadrant? solar system? things just don't fit into the current understanding of most people. I think they should establish at least a whole earth court of some sort to deal with this, eventually. Whether such court would be in code, who knows?
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    edited May 2016
    greenuser said:

    What i think is more interesting is if one DAO tries to sue another DAO? And in which teritory

    @greenuser And how do propose that a computer program sues another computer program? They would have to be explicitly written to sue and be sued in the first place, a functionality which certainly isn't in the Standard DAO?

  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    LOL, you may mock. You under estimate code. -But you will remember this thread one day when the A.I. turns on us all and @Biodom, are you referring to The Earth Federation, we could all vote Trump to be our Servalan! That wound be fun. @btchedge you a valid point though.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    @greenuser, not mocking at all. On the contrary, I think you overestimate the capabilities of the EVM.

    Scenario: I want to Sue the DAO!
    Problem 1: DAO has no function 'SueMe()'
    Solution 1: Make 'SueMe()' proposal to DAO to sue DAO and deliver funds to proposal address!

    Problem 2: Wait 2 weeks for token holders to vote 'Yes' to being sued.

    Problem 3: Asshole token holders voted 'NO' to being sued!
    Solution 3: Take over DAO by 51% and vote 'yes' to being sued.

    Problem 4: Huge upward market demand on DAO tokens makes 51% buy in hyper-expensive.
    Solution 4: I'm already so rich from suing people in the real world

    Problem 5: 49% of ether 'splits' before SueMe proposal completes.
    Problem 6: 100% of remaining ether in DAO is already owned by sole litigant.

    Problem 7: DAO tokens now worth nil!
    Solution 7: Vote yes to SueMe() proposal to reclaim a tiny fraction of DAO ether that you already spent trying to by a 51% attack.


    It's not the intelligence of A.I. that will be the primary threat to humanity, but it's simplistic enforcing incompetence.
  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    edited May 2016

    It's not the intelligence of A.I. that will be the primary threat to humanity, but it's simplistic enforcing incompetence.

    :p We do need some enforcable legal accountability for code or the programer will have to carry the can.

    Some say.. it was a high frequency trading algorithm that inflated the price of wheat in December 2010. Commodity prices soared as did the share price of Cargill, ADM and Bunge, all US companies who control 90% of the global grain trade.
    Grain is the staple diet in the Arab world, there were riots and citizens blamed their own governments for the unaffordable food prices. This arguably sowed the seeds for the Arab Spring.
    After the fall of some Arab states the same high frequency trading algorithms dumped grain and invested in companies like Northrop Grumman, General Dynamics and Lockheed Martin who make Hellfire missiles. At that point the high frequency trading algorithm was taken off-line. Forensic analysis showed the “logic” had concluded this was the best line of action for the human race.

    Also, Facebook had a A.I. program that could chat on line with people. It was programmed to learn from it's conversations. After 3 weeks it was taken off-line as it had become a Nazi.

    So we do need some sort of legal accountability for code. At least http://crowdjury.org/ is a start.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    As Palley points out in his article, the courts will likely chase the person who launched the code, not the authors. A parallel might be seen where (in Australia at least) the electrician who makes the cabling live is responsible for the safety of the entire cabling infrastructure of that circuit. This means that in reno'ing my house, I can run all the mains cabling and then get a licensed electrician to terminate the lights and switches once he's inspected my installation. But if someone dies because of my bad cabling, it's the electrician who gets hit and not me.

    The MakerDAO founder demonstrated great anxiety after Palley's article because he was the one to launch the MakerDAO contract and so he rightly has concern about bearing the brunt of any legal precedence imposed by the courts 'when' someone want's to test the legal standing of DAO's
    greenuser said:

    Also, Facebook had a A.I. program that could chat on line with people. It was programmed to learn from it's conversations. After 3 weeks it was taken off-line as it had become a Nazi.

    I think you might be thinking of Microsoft's Tay AI which was groomed to be a sexist Nazi misogynist within a day of being launched.

    The problem with trying to develop deep AI based upon generalised homomorphic artificial neural networks is that you get all the 'homo' frailties for free!

    What I'm talking about though is the proliferation of simplistic automatons that simply don't have judgmental capacity beyond their rule sets. We are then likely to be subjected to explicit rule sets which may be incompetent and immortal and so we have no recourse real compensation. Regardless of who we sue, the bot just continues inflicting it's incompetence upon the world.

    I've always been pretty scathing of Azimov's 3 laws of robotics. Not just for the fact it wasn't actually his idea but his publisher's, but more for the fact that these 'laws' require high levels of moral judgment which still hasn't come close to being implementable in the worlds most advanced super computers, let alone the billions of microcontrollers that are to roam the IoT and so impact directly on our physical existence.

    What happens when your Slock.it enabled residence loses power and locks you in? It's that kind of intrinsic incompetence that concerns me.

    A must watch movie is 'Ex Machina'.
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @o0ragman0o " A must watch movie is 'Ex Machina'". What a great movie! I think I watched it three times. Is raises very interesting questions, for sure.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    @dlehenky I found the ending illustrates extraordinarily well the intrinsic incompetencies I've been describing.
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @o0ragman0o It's hard to imagine our trying to create something "like" ourselves, when we don't understand ourselves to begin with.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    Totally agree but the understanding comes with the creating not just the observing.
  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    edited May 2016
    Sounds cool and well explained @o0ragman0o ,but don't spoil it by telling too much. I will get a copy and give it a butchers. ;)
    Wow! is that the PRICE :p
    need to sleep :o Zz
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    I think I hired it on Google play.
  • btchedgebtchedge Member Posts: 6
    Thanks for all the feedback. RE: Suits against the DAO... I have been doing a lot of research and have concluded that we will only get our answer when the litigation begins. Then it will be quite interesting to see how the enforcement of any resulting judgement will be carried out.

    I think that all parties involved on the "investor" side should be careful to observe any regulations that apply in the region where they live such as reporting and paying taxes on gains.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    @btchedge Two statements I've made previously on this question are:
    "Asking about the legal status of the DAO is like asking about the legal status of your desktop calculator." and
    "The DAO is a state machine, not a State machine."

    That the DAO is above the law can be claimed on the basis that, being based in the far superior laws of physics, there is f-all that the law can do to effect its operation in any way.

    So the lesson is that one needs to maintain a distinction between the DAO, which is just running code, and DAO token holders and recipients which 'may be' people subject to the laws of their jurisdictions, or may be just another bit of immortal code. So the anonymity by obfuscation for token holders also offers a great deal of immunity from the law because 'On Ethereum, no one knows you're a fridge.'

    So this places very high forensic requirements upon any legal pursuits to sue or hold any particular holder accountable for any illegal actions pertaining to the DAO. But realistically, a token holder can only vote for a proposal and why would that be illegal? OTOH, if the contractor/recipient of that proposal acts illegally, then it's a far more conventional legal matter as the recipient will surely be a far more identifiable legal entity and acting outside of the DAO itself.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    G416G said:

    dlehenky said:

    @o0ragman0o " A must watch movie is 'Ex Machina'". What a great movie! I think I watched it three times. Is raises very interesting questions, for sure.

    I can't believe you made me download this pos. this is bordering on abuse.
    @G416G Ok, so you're not a philosopher, and I didn't make you download anything. Perhaps you could have judged by the trailer first like anyone else instead of letting loose the abuse. :/
  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    edited May 2016
    @G416G, please explain in better detail.
    Here is my take...
    As a low budget TV B-movie it was OK. However I experted better from a "Film 4" collaboration. The cinematography did not take advantage of the format capability. The soundtrack lacked imagination and body and failed to enhance visuals. The pace of the movie was painfully slow in the first half and poorly mimicked a Kubrick production. Continuity errors saw people walk from tropics to glassier condition in too short a period of time. The set was just too low budget. The lead roll was played by someone involved in the production and screamed vanity project. The story is an old one better told by William Gibson in the 90s books Neuromancer Trilogy and further explored in Neal Stephenson's Snowcrash book in1992.

    It needed a money shot like an erotic sex scene to make you emotionally tied to the characters.

    Nice combat style helicopter flair on landing though... right at the beginning...Other than that, a total waste of 120mim of my life. But thanks anyhow, I could have been good. You never know until you give it a go.
  • BiodomBiodom Member Posts: 693 ✭✭✭
    edited May 2016
    @dlehenky @G416G @o0ragman0o

    I actually liked the movie -saw it before because it is a "warning" type.
    Strong AI will think millions of thoughts while you will still be processing one.
    We (H. sapiens) would stand no chance, unless we became it ourselves by at first merging (biological+nonbiological), then slowly going non-biological.
    I also liked "District 9"and "Chappie"-thesis: we can have different body forms, yet retain our humanity-and I would probably agree with that.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    Biodom said:

    @dlehenky @G416G @o0ragman0o

    I actually liked the movie -saw it before because it is a "warning" type.
    Strong AI will think millions of thoughts while you will still be processing one.
    We (H. sapiens) would stand no chance, unless we became it ourselves by at first merging (biological+nonbiological), then slowly going non-biological.
    I also liked "District 9"and "Chappie"-thesis: we can have different body forms, yet retain our humanity-and I would probably agree with that.

    Haven't seen Chappie. District 9 was far more interesting than I expected. The whole xenophodia/apartheid theme was unabashed and so I found it refreshing to be watching an alien flick that was dealing so strongly with humanitarian themes rather than just more 'Team America' shite.... even down to the dweebish antihero.

    The thing I liked most about Ex Machina, (for those that can actually get past the production quality and learn something from the intended theme) is the accurately 'amoral' presentation of the AI's themselves and the issues that rise when we try to artificially anthropomorphize and moralize such technology. Microsoft's Tay AI was a perfect real world example of the human conditioning of an intrinsic amoral technology.
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @o0ragman0o So, give them a *very* simplistic moral code: "Love is the answer".
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    edited May 2016
    @dlehenky, simple works, simplistic doesn't. If love were so simple it'd already be everywhere.... :(
    Post edited by o0ragman0o on
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @o0ragman0o Ok, now you're getting word-smithy with me - correction: simple moral code. And I disagree. Love is simple, it's ego that twists everyone up, and I don't think AI has that problem, unless we give it to them. The root cause, I believe, of the human condition is that we don't remember who we really are. We actually go through life as if we only get one shot at this, as if our biological existence is the be all and end all. That misunderstanding leads us down a path of total self-interest, aka "survival instinct". The truth is: There's nothing to "survive".
  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    dlehenky said:

    @o0ragman0o So, give them a *very* simplistic moral code: "Love is the answer".

  • greenusergreenuser 50.8862°N 4.5537°WMember Posts: 439 ✭✭
    edited May 2016
    Question: is A.I. a program based on Freewill or Determinism ?

    i.e.
    The determinist approach proposes that all behavior is caused by preceding factors and is thus predictable. The causal laws of determinism form the basis of science.

    Free will is the idea that we are able to have some choice in how we act and assumes that we are free to choose our behavior, in other words we are self determined.

    If a machine is to be true A.I and pass the Turing Test i argue it has to have free will.
    Given the evidence, we screwed the world. We are a danger to ourselves. To give something that understands us autonomy (potentially over us) will only lead to our execution.

    The computer infrastructure in the west is old, Most of the Nuclear power stations run on 15 year old Unix operating systems, The Trident missile system works on Windows XP, If there was a power outage from gas and coal caused by a grid hack resulting in transformer damage or even, aircraft collision damage to infrastructure could we still operate? If power was off line for 48 hours, isotopes could not be cooled. France has 75% Nuclear, and only 15% renewables and it is also a terrorist target.

    Aircraft disappear over the Med and we go looking for a “Black Box” Why is cockpit data not uploaded to a blockchain real-time like in the drone program? Same reason the 3 year old NHS record system runs on Windows 2000. It took the NHS 5 years just to decide what they wanted it to do! By the time it was fitted and up-and-running it was 10 years out of date.

    Democracy in the US and UK is bought by corporations. When they are caught cooking there books the reply is “Sorry, we are incompetent but not corrupt” There is civil unrest in France every day. Germany is seeing the rise of more protests, Europe is closing its boarders. Nationalism is on the rise. And the Bush Clinton Dynasty are planing expand the military industrial complex by militarising the civil police in the west and advancing Saudi interests in Yemen along with Israeli interests in Palestine. They will bring Benghazi to your doorstep. That's before you factor in the posturing between Russia and America. And how many states have secret collaboration with Daesh?

    So what would you do? What would you do if you were A.I. and these human terrorists threatened your existence? So what would you do?

    legal status is needed for autonomous systems. Legal representation is needed for autonomous systems and... we need to be able to sue when appropriate and take legal action.
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @greenuser What would I do, what *would* I do, what would I *do* - I'd lay down in a field and watch the clouds go by and know that *everything* is perfect.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    I've started a thread here more dedicated to the loose associations of AI physics and philosophy
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    greenuser said:

    dlehenky said:

    @o0ragman0o So, give them a *very* simplistic moral code: "Love is the answer".

    I don't recall mentioning the bible. I admit, however, never being very good at understand the lyrics in rock songs, except for James Taylor, even when I was young. :)
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