According to Foresight News, the Legal Commission of England and Wales, initiated by the Department of Justice, has released a statement discouraging the establishment of a new legal framework for Decentralized Autonomous Organizations (DAOs). The commission argues that DAOs may still be subject to existing regulations.
If a DAO engages in 'specific activities' related to 'specific investments', it may be subject to the constraints of the Financial Services and Markets Act 2000 (FSMA). Governance tokens, which resemble stocks, grant voting rights, and are issued in exchange for investing in DAOs, are considered specific investments.
The report suggests that the public law applicable to DAOs will depend on the type of DAO. Some DAOs can be described as unincorporated associations, where participants interact according to established rules. Meanwhile, smart contracts can constitute legal contracts.