What types of activities or operations may be subject to regulation for a DAO?
Select jurisdiction
Germany
In this regard it needs to be differentiated between the main activity of the DAO and the
activities related to the offering of its own governance tokens.
The token sale may be subject to the general rules on public offerings. This requires on the
one hand, that the governance token qualifies as a financial instrument, in particular as a
security. On the other hand, the public sale of this financial instrument must basically be
subject to regulation. Consequently, the governance tokens must be offered to the public as well, hence not only to a narrow circle of investors or participants.
Regarding the main activity of the DAO, in particular collecting and investing funds may be
subject to regulation. The same applies if the DAO offers financial services, e. g. crypto
custody services. Commercial activities, which are generally subject to regulation e. g.
offering gambling services to the public, may also play a role.
Apart from this, single operations of the DAO may be subject to regulation as well. E. g. if the DAO processes personal data, data protection regulations may apply.
In general, the question which activities or operations of a DAO may be subject to regulation, requires an assessment in each case. As DAOs may pursue widely different activities, further
activities that are not covered by this article may also be subject to regulation.
Poland
In Polish jurisdiction, certain activities or operations of a DAO may be subject to existing regulations, depending on the nature of the activities. Some examples include:
1. Financial services: If a DAO provides financial services or products, such as lending,
borrowing, or asset management, it may be subject to financial regulations and licensing
requirements overseen by the Polish Financial Supervision Authority (KNF) or other relevant
regulators.
2. Securities regulations: If a DAO issues tokens or other digital assets that are considered
securities under Polish law, it may be required to comply with securities regulations,
including registration, disclosure, and ongoing reporting requirements.
3. Anti-money laundering (AML) and counter-terrorism financing (CTF) regulations: If a DAO is
involved in activities that fall under the scope of AML and CTF regulations, such as operating
a platform for buying, selling, or exchanging cryptocurrencies or other digital assets, it may
be required to implement AML and CTF measures, including Know Your Customer (KYC)
checks and transaction monitoring.
4. Taxation: DAOs and their participants may be subject to various tax regulations, depending
on the nature of the DAO's activities and the tax residency of its participants. This may
include income tax, corporate tax, and value-added tax (VAT) obligations.
5. Data protection and privacy: If a DAO processes personal data, it may be subject to data
protection regulations, such as the General Data Protection Regulation (GDPR), which
require organizations to provide information about their data processing activities to
individuals and regulatory authorities.
6. Consumer protection: If a DAO offers goods or services to consumers, it may be subject to
consumer protection laws that require transparent and fair business practices, as well as
providing remedies in case of disputes.
