Fund Regulation

More decentralised autonomous organisation (DAO) mysticism

We’ve flagged cryptocurrency enthusiasts’ distinctly mystic beliefs in spontaneously emergent headless organisms before. Now something called the “Decentralised Autonomous Organisation” — The DAO, not to be mistaken with Tao — project has begun to attract actual column inches in mainstream publications, albeit in keeping with the new style of journalism… i.e. devoid of critical evaluation and taking all claims at face value. The DAO is currently raising Ether tokens (the pre-mined currency of the Ethereum blockchain, itself funded via a bitcoin capital raising) — $110m at mark-to-market rates today — in exchange for DAO, a token which “grants its holder voting and ownership rights.” As Techcrunch put it, holders of DAO “can use their tokens to vote on big governance issues (akin to traditional shareholders) but also on minute details of how The DAO spends its resources. In this way, token holders have total control over The DAO’s assets and its actions.” The DAO explicitly states its tokens are not a form of equity — even if to the average bystander everything about the DAO token looks, smells and feels like common equity. (Perhaps the feeling is that if you dazzle them with “tokens” instead of stocks, those pesky unlicensed stock solicitation rules won’t apply? We’re not sure regulators will see it that way.)

You are on page 1

FT Alpha Tweets