<\/p>\n
The lawsuit shows decentralized organizations increasingly need legal structures to operate in the offchain world.<\/p>\n
PleasrDAO may be one of the most crypto-native organizations, yet it\u2019s recurring to a very \u201ctrad\u201d tactic: A good, old-fashioned lawsuit.<\/p>\n
The DAO sued convicted felon known as \u201cpharma-bro,\u201d Martin Shkreli<\/a>, on June 11 for breaking intellectual property rights.<\/p>\n The collective, which paid $4.7 million for the rights to the one-of-a-kind album Once Upon a Time in Shaolin, recorded by famed hip-hop group Wu-Tang Clan, alleges Shkreli made multiple unauthorized copies of the album and released them to the public.<\/p>\n The lawsuit points to the growing trend of decentralized organizations facing the need to create legal structures for their operations.<\/p>\n According to Adam Miller, CEO and co-founder of MIDAO, an organization that helps DAOs & Web3 projects incorporate themselves legally in the Marshall Islands, PleasrDAO\u2019s lawsuit could be one step towards a more mature DAO ecosystem.<\/p>\n \u201cThis pushes the envelope so other DAOs realize they should get a legal entity,\u201d Miller told The Defiant. Miller added that it shows people in Web3 that legal entities aren\u2019t entirely anti-crypto nor a bad idea.<\/p>\n PleasrDAO is a collective of DeFi traders, early NFT collectors, and digital artists that have been collecting unique NFTs since 2021. PleasrDAO first organized to buy an NFT<\/a> by digital artist Emily Yang, who is also known as Pplpleasr, hence the DAO\u2019s name.<\/p>\n The organization, legally represented as an \u201cexempted foundation company,\u201d which means it is not subject to income, withholding, or capital gains taxes, sued Martin Shkreli on June 11.<\/p>\n Once Upon a Time in Shaolin is a one-of-a-kind album created by famed hip-hop group Wu Tang Clan in a bid to \u201csave the music industry from crisis.\u201d <\/p>\n Only one individual copy was created, and subsequently sold, and hadn\u2019t been listened to until Shkreli allegedly played portions of the album during a livestream he hosted on X over the weekend of June 8-9, in an event he called the \u201cWu-Tang official listening party.\u201d<\/p>\n Shkreli\u2019s move came just a couple of days before PleasrDAO had planned its own<\/a> first public listening, which took place in a church in NYC on June 8.<\/p>\n PleasrDAO went to court to protect its property and some in the crypto community were quick to criticize the move.<\/p>\n Pseudonymous internet troll 0xMakesy wrote<\/a> on X after the lawsuit was filed \u201cDrop the \u2018DAO\u2019, it\u2019s cleaner,\u201d which was retweeted by crypto-native lawyer, Gabriel Shapiro. Several users agreed, including<\/a> Hadron Labs general council, \u201clawpanda,\u201d who wrote \u201chey could have just named it Pleasr Foundation, smdh.\u201d<\/p>\n But Miller said legal entities don\u2019t inherently reduce decentralization.<\/p>\n \u201cDecentralization might not even refer to the social structure but rather the underlying technology,\u201d he said. \u201cIf organizations are using a distributed ledger for its tokens, then what\u2019s not to say it\u2019s decentralized?\u201d<\/p>\n Uniswap founder Hayden Adams echoed the sentiment<\/a>.<\/p>\n \u201cPeople complaining about DAOs suing don\u2019t realize Pleasr is basically a member-owned museum,\u201d he wrote on X, adding that the DAO part is \u201cbecause many of its components and assets live onchain.\u201d<\/p>\n \u201cIt\u2019s not a public DAO anyone can buy into, [and] of course they\u2019re protecting IP rights to the Wu Tang album they spent $5 million on,\u201d Adams said.<\/p>\n Miller works directly with the Marshall Islands, which is one of the only jurisdictions that explicitly recognizes the legal structures of DAOs.<\/p>\n And for him, these types of organizations are helpful for governments themselves, aiding with some much-needed transparency. \u201cGovernments get way more visibility into how a company operates,\u201d he explained. It\u2019s a tradeoff, in Miller\u2019s mind, that despite using crypto at its core, authorities will simply have to accept.<\/p>\n Another jurisdiction that recognizes DAOs is the state of Wyoming in the U.S. The state recently created a statute dubbed DUNA\u2013the Decentralized Unincorporated Nonprofit Association\u2013which expands the already friendly legal waters for DAOs in the state.<\/p>\n Experts in crypto-related law gave it two thumbs up<\/a> after it passed.<\/p>\n A number of other states also reportedly<\/a> acknowledge and have passed DAO specific regulations, including Utah, Vermont and Tennessee.<\/p>\n While the previous examples show progress with DAOs getting more regulatory clarity in the traditional world, there are projects working towards finding legal certainty in a decentralized economy.<\/p>\n Kleros, dubbed the \u201cJustice Protocol,\u201d is an open source online dispute resolution protocol which uses blockchain and crowdsourcing to fairly adjudicate disputes.<\/p>\n PleasrDAO is not the only DAO to take legal action. Token holders of Aragon, a project meant to \u2013 perhaps ironically\u2013 help create and run DAOs, voted to sue the Aragon Association for allegedly offering an unfair redemption plan amid dissolution.<\/p>\n On Nov. 21, the DAO voted<\/a> to allocate 300,000 USDC to Patagon Management, a Delaware-based company owned by Diogenes Casares, to take legal action against Aragon.\u00a0<\/p>\n The funds allocated to support the lawsuit constitute a \u201chighly conditional grant\u201d that was sent to Patagon Management LLC, a Delaware-based trading firm that previously engaged in \u201csimilar legal action\u201d against SpartacusDAO\u2019s alleged founder, Wei Wu, on behalf of token holders.<\/p>\n Similar legal action against Wu refers to a $35 million freeze that a judge slapped against SpartacusDAO\u2019s leader after SPA token holders were unsatisfied with the progress with the crypto yield project.<\/p>\n Francisco D\u00edaz, a researcher at TalentDAO, who also p<\/a>articipates in the Decentralized Science space, says legal recourse is especially important in DeSci.<\/p>\n \u201cIn DeSci it\u2019s important to have that legal entity so we can register intellectual property on medical patents, for example,\u201d he pointed out.<\/p>\n \u201cIf a DAO has a big influence in the physical world, then it might be useful for them to search for jurisdictional protection,\u201d said D\u00edaz, \u201cIf a DAO wants to have an impact outside of the digital world, it needs to have an \u2018offchain\u2019 entity that can deal with legal situations like these.\u201d<\/p>\n As for the status of the album that spawned the controversy, PleasrDAO have decided to give people a chance to listen to it, even if it was meant to be released in 2103.<\/p>\n Fractions of the album are now available for purchase on its official website<\/a> as $1 NFTs on Base<\/a>. Every purchase accelerates 2103 by 88 seconds.<\/p>\n As of writing, more than 95,500 albums have been collected by 4,308 unique collectors.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The lawsuit shows decentralized organizations increasingly need legal structures to operate in the offchain world. PleasrDAO may be one of the most crypto-native organizations, yet it\u2019s recurring to a very \u201ctrad\u201d tactic: A good, old-fashioned lawsuit. The DAO sued convicted felon known as \u201cpharma-bro,\u201d Martin Shkreli, on June 11 for breaking intellectual property rights. The […]<\/p>\n","protected":false},"author":2,"featured_media":325183,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-325181","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/325181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=325181"}],"version-history":[{"count":3,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/325181\/revisions"}],"predecessor-version":[{"id":325185,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/325181\/revisions\/325185"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/325183"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=325181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=325181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=325181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Pplpleasr NFT<\/h2>\n
One-of-a-Kind Album<\/h2>\n
Controversy Ensues<\/h2>\n
DAO Status Across Jurisdictions<\/h2>\n
Legal Clarity Onchain<\/strong><\/h2>\n
Offchain Impact <\/h2>\n
Music To The People<\/strong><\/h2>\n