A federal court judge ruled Monday that Lido DAO, the governing body behind the popular liquid staking protocol, can be treated as a general partnership under state law. The court rejected Lido’s claim that it is not a legal entity, classifying it as a general partnership and setting a precedent for how profit-oriented DAOs should be treated.
It also ruled that identifiable participants managed the DAO’s operations and therefore could not evade liability through its decentralized structure, according to court documents filed in the U.S. Northern District Court in California. Paradigm Operations, Andreessen Horowitz, and Dragonfly Digital Management were held liable as general partners based on their alleged active participation in Lido’s management and operations.
According to court documents, plaintiff Andrew Samuels purchased LDO tokens on the secondary market in April and May 2023 through the Gemini exchange. By December of that year, Samuels had filed a class action lawsuit after he suffered losses from purchasing the platform’s native LDO tokens, claiming they were sold to him as unregistered securities and holding Lido DAO responsible for the decline in their value.
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